The Stars Group Announces the Sale of its Securities of NYX Gaming Group to Scientific Games
24 Nov, 2017, 07:30 ET
TORONTO, Nov.24, 2017 /CNW/ - The Stars Group Inc. (Nasdaq: TSG; TSX: TSGI) today announced that it and one of its wholly-owned subsidiaries, Stars Interactive Holdings (IOM) Limited ("Stars Interactive IOM"), entered into a securities purchase agreement (the "Securities Purchase Agreement") with Scientific Games Corporation ("Scientific Games") on November 23, 2017 (the "Agreement Date") pursuant to which Stars Interactive IOM has agreed to sell to Scientific Games on November 24, 2017 (the "Effective Date") all of its securities of NYX Gaming Group Limited ("NYX"), including securities exchangeable into securities of NYX (the "Disposition").
The securities to be sold under the Disposition include: (i) 5,617,716 ordinary shares of NYX ("Ordinary Shares"), (ii) 40,000 preferred shares (the "Preferred Shares") of NYX Digital Gaming (Canada) ULC, and (iii) 1,363,636 Ordinary Share purchase warrants (the "Warrants"). As a result of the Disposition, The Stars Group will no longer directly or indirectly beneficially own, control or direct any securities of NYX.
Pursuant to the Securities Purchase Agreement, the Ordinary Shares will be sold at a price of CDN$2.40 per Ordinary Share, the Preferred Shares will be sold at a price of CDN$2.40 per Ordinary Share-equivalent (calculated as of November 24, 2017) per Preferred Share, and the Warrants will be sold for no consideration, in each case on the Effective Date to Scientific Games, representing aggregate consideration payable in cash of CDN$35,500,992. In addition, Scientific Games has agreed to pay Stars Interactive IOM a purchase price adjustment in certain circumstances where Scientific Games acquires NYX for consideration in excess of CDN$2.40 per Ordinary Share or sells its securities of NYX for consideration in excess of CDN$2.40 per Ordinary Share.
As previously disclosed in its early warning report dated September 21, 2017 (the "September EWR"), The Stars Group and Stars Interactive IOM have entered into a support agreement (the "Support Agreement") with Scientific Games on September 20, 2017 relating to the proposed acquisition of NYX by Scientific Games by way of a court-sanctioned scheme of arrangement under The Companies (Guernsey) Law, 2008, as amended (the "Transaction"). Pursuant to the Securities Purchase Agreement, The Stars Group, Stars Interactive IOM and Scientific Games have agreed to terminate the Support Agreement. Termination of the Support Agreement does not otherwise affect the Transaction.
As previously disclosed in the September EWR, The Stars Group, through Stars Interactive IOM, has beneficial ownership of 5,617,716 Ordinary Shares, 40,000 Preferred Shares which on the Effective Date are exchangeable into 9,174,364 Ordinary Shares, and 1,363,636 Warrants. Each Warrant has an exercise price of CDN$3.50, is exercisable into the same number of Ordinary Shares and expires on April 26, 2019.
Assuming (i) the exchange of the Preferred Shares, and (ii) the exercise of the Warrants, held indirectly by The Stars Group, in each case on the Agreement Date or the Effective Date and on the basis of 108,200,000 Ordinary Shares issued and outstanding (as disclosed in NYX's management's discussion and analysis for the period ended September 30, 2017 (the "NYX MD&A")), The Stars Group had on the Agreement Date and has on the Effective Date, prior to the Disposition, beneficial ownership of and control or direction over approximately 13.7% of NYX's Ordinary Shares on a partially diluted basis (with the denominator equal to the Ordinary Shares issued and outstanding plus the Ordinary Shares issuable to The Stars Group in clauses (i) and (ii) above).
Excluding Ordinary Shares underlying the Preferred Shares and the Warrants, which are in each case deemed to be beneficially owned by The Stars Group, and on the basis of 108,200,000 Ordinary Shares issued and outstanding (as disclosed in the NYX MD&A), The Stars Group had on the Agreement Date and has on the Effective Date, prior to the Disposition, beneficial ownership of and control or direction over approximately 5.2% of NYX's Ordinary Shares on an issued and outstanding basis.
The Ordinary Shares, Preferred Shares and Warrants will be disposed of on the Effective Date pursuant to the Securities Purchase Agreement as a result of investment considerations, including market conditions, general economic and industry conditions, trading prices of NYX's securities, NYX's business, financial condition and prospects and other relevant factors. The Stars Group has no current intention to purchase any securities of NYX or other plans or intentions that would relate to or would result in any change to its investment in NYX.
An early warning report will be filed by The Stars Group in accordance with applicable securities laws.
About The Stars Group
The Stars Group is a leading provider of technology-based products and services in the global gaming and interactive entertainment industries. Through its Stars Interactive Group division, The Stars Group ultimately owns gaming and related consumer businesses and brands, including PokerStars, PokerStars Casino, BetStars, Full Tilt, StarsDraft, and the PokerStars Championship, PokerStars Festival and PokerStars Megastack live poker tour brands (incorporating aspects of the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour). These brands together have more than 115 million registered customers globally and collectively form the largest poker business in the world, comprising online poker games and tournaments, sponsored live poker competitions, marketing arrangements for branded poker rooms in popular casinos in major cities around the world, and poker programming and content created for television and online audiences. The Stars Group, through certain of these brands, also offers non-poker gaming products, including casino, sportsbook and daily fantasy sports. The Stars Group, through certain of its subsidiaries, is licensed or approved to offer, or offers under third party licenses or approvals, its products and services in various jurisdictions throughout the world, including in Europe, both within and outside of the European Union, the Americas and elsewhere. In particular, PokerStars is the world's most licensed online gaming brand, holding licenses or related operating approvals in 17 jurisdictions.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements and information within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable securities laws, including, without limitation, as it relates to the Securities Purchase Agreement and The Stars Group's intention with respect to its investment in NYX. Forward-looking statements and information can, but may not always, be identified by the use of words such as "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "would", "should", "believe", "objective", "ongoing", "imply" and similar references to future periods or the negatives of these words and expressions. These statements and information, other than statements of historical fact, are based on management's current expectations and are subject to a number of risks, uncertainties, and assumptions, including market and economic conditions, business prospects or opportunities, future plans and strategies, projections, technological developments, anticipated events and trends and regulatory changes that affect us, our subsidiaries, and our and their customers and industries. Although The Stars Group and management believe the expectations reflected in such forward-looking statements and information are reasonable and are based on reasonable assumptions and estimates as of the date hereof, there can be no assurance that these assumptions or estimates are accurate or that any of these expectations will prove accurate. Forward-looking statements and information are inherently subject to significant business, regulatory, economic and competitive risks, uncertainties and contingencies that could cause actual events to differ materially from those expressed or implied in such statements. Specific risks and uncertainties include, but are not limited to, those identified in The Stars Group's Annual Information Form for the year ended December 31, 2016, including under the heading "Risk Factors and Uncertainties", and in The Stars Group's management's discussion and analysis for the three and nine months ended September 30, 2017, including under the headings "Risk Factors and Uncertainties", "Limitations of Key Metrics and Other Data" and "Key Metrics", each available on SEDAR at www.sedar.com, EDGAR at www.sec.gov and The Stars Group's website at www.starsgroup.com, and in other filings that The Stars Group has made and may make with applicable securities authorities in the future. Investors are cautioned not to put undue reliance on forward-looking statements or information. Any forward-looking statement or information speaks only as of the date hereof, and The Stars Group undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
SOURCE The Stars Group Inc.
For further information: For investor relations and further information regarding the early warning report, including a copy of same (which will be filed on SEDAR at www.sedar.com), please contact: Tim Foran, Tel: +1.437.371.5730, [email protected]; For media inquiries, please contact: Eric Hollreiser, [email protected]
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