NYX Gaming Group, a specialist in online betting, announced an anti-trust lawsuit against William Hill following the former’s failed $630 million acquisition by Scientific Games Corp, a casino equipment and lottery services provider. According to the lawsuit, the acquisition failed due to deliberate attempts to block it by William Hill, which is a shareholder of NYX with a vested interest in the company. Back in September, Scientific Games announced that it would attempt to create a global digital gaming system, which is why they chose to acquire NYX and have them aid the company in that rather ambitious venture. Even at the time, NYX’s shareholders (which hold 17% of NYX’s fully diluted shares) voted in favor of the acquisition almost unanimously. The emphasis falling on “almost”.
William Hill was firmly opposed against the merger, claiming that NYX’s purchase of OpenBet back in 2016 made the whole deal a lot more complicated than it should have been. OpenBet used to belong to William Hill, but upon its purchase for $354.5 million William Hill gained a certain amount of stock in NYX. NYX’s acquisition by Scientific Games thus results in a conflict of interest, as far as William Hill claimed. Their intention was to stall the deal, demanding to look over the various legal documents associated with it and an agreement about how certain assets could be transferred or liquidated could be reached. In what can be interpreted as a power move, William Hill made those demands very public, putting a lot of pressure on both NYX and Scientific Games.
William Hill may have had good points – I’ll spare you the math, but at the end of the day, it turns out that they own over 30% of NYX’s shares, and should have a say in the matter. The only problem is that not only did the stalling essentially kill the merger in the womb, it was also extremely costly for both NYX and Scientific games, which is why the former chose to take William Hill to court, accusing the company of wrongful conduct in violation of the New Jersey Antitrust Act. As of this moment, NYX is suing William Hill for injunctive relief, treble damages and attorney’s fees, among other punitive damages, claiming that their interference with a deal that NYX believe didn’t concern them was too costly to just let slide. Before too long, a New Jersey Superior Court will hear the case and, eventually, issue a verdict, and depending on that outcome, the NYX-Scientific merger might still happen. Scientific in particular have already invested $30 million out of the $630 million deal, so they obviously have a vested interest in NYX winning the lawsuit and getting William Hill to back off. Regardless, both sides have valid points, and at this point only time will tell which one will come out on top.