Toronto-based Score Media and Gaming Inc. has announced that its shareholders have okayed its acquisition by Penn National Gaming Inc. The meeting took place on Tuesday, October 12th, in a special meeting where the company shareholders overwhelmingly voted in favor of the $2 billion buyout announced in early August.
On September 10th, a month after Score Media disclosed its plans to go under the wing of Penn National Gaming, the Supreme Court of British Columbia granted an Interim Order that allowed theScore to move forward with making preparations for the arrangement. Part of the preparations included the shareholder meeting, and now that the voting is complete, the deal is expected to close on October 19th, down from early 2022.
The transaction now awaits the Final Order from the Supreme Court of British Columbia to proceed. It will also be subject to the satisfaction or waiver of a range of conditions tabled by Penn National Gaming.
How Shareholders Voted in the Acquisition Matter
For the acquisition arrangement to move forward, at least two-thirds majority of Score Media and gaming shareholders were required to give the green light in a vote cast in-person or by proxy. Further, the buyout deal needed a simple majority of the votes cast (in person or by proxy) by shareholders in each separate class of stock.
In such cases, the voting must also be conducted per the guidelines of the Multilateral Instrument for Protection of Minority Security Holders in Special Transactions (MI 61-101). Accordingly, this rule dictates that the votes of individuals attached to, the Class A Subordinate Voting Shares on one count and Special Voting Shares on another, are excluded for the sake of ‘minority approval.
So, during the Tuesday meeting, 99.96% or 37,202,211 of Class A subordinate and special voting shareholders voted for the company’s acquisition arrangement. Meanwhile, only 0.04% or 13,881 of the votes cast were against it. Additionally, of all the tallied votes, 557 were cast by stakeholders deemed ‘Special Voting Shareholders.’ As a result, they had to be factored out of the tally per the M1 61-101 regulations. This, therefore, brought the total number of votes cast in favor of the buyout deal to 36,582,187, leaving the percentage volume of the approval votes unaffected at 99.96%.
This Acquisition is A Substantial Win for Penn National Gaming
Score Media and Gaming Inc was founded in 2012 by John S. Levy, the current Chairman, and Chief Executive Officer. Through its media app, ‘theScore,’ the company serves the North American market with highly personalized news, stats, scores, betting information about players, teams, and leagues. Additionally, theScore has web, social, and esports platforms through which it creates and distributes leading-edge digital content to users.
In the USA market, Score Media and Gaming operates a popular sportsbook app known as ‘theScoreBet’ to deliver what it refers to as an ‘immersive and holistic experience’ for mobile sports bettors. theScoreBet is currently present in Colorado, Indiana, Iowa, and New Jersey. In the Canadian sports betting market, where single-game wagering was okayed in late August, theScore is the leading sportsbook application.
Under the terms of the acquisition agreement, Score Media and Gaming shareholders will receive a cash consideration of $17 and 0.2398 Penn National Gaming common stock shares for each Score Media and Gaming share they hold. This brings the total purchase consideration of Score Media and Gaming at $34 a share. So, when the transaction is closed, current shareholders of Penn National Gaming and Score Media and Gaming will hold roughly 93% and 7%, respectively, of the outstanding shares of the combined entity.
After the acquisition, the Levy family will continue with the leadership role at Score Media and Gaming.