Maverick Gaming LLC signed a into a letter of intent to acquire 94.3% stake in Evergreen Gaming Corporation (TSXV:TNA) from Steve Michels, Leonard Libin, Tom Marvin and others on March 26, 2022. Maverick Gaming LLC entered into an arrangement agreement to acquire 94.3% stake in Evergreen Gaming Corporation (TSXV:TNA) from Steve Michels, Leonard Libin, Tom Marvin and others for $73.6 million on September 8, 2022. In a related transaction, Maverick Gaming LLC entered into an initial purchase agreement to acquire 5.7% stake in Evergreen Gaming Corporation from Michel's Development, LLC for $3.9 million. Under the transactions, Maverick would acquire 100% of the outstanding common shares of Evergreen for cash consideration of $0.55 per Evergreen share subject to adjustment. As of November 30, 2022, Maverick has amended the agreement, Maverick would acquire 100% of the outstanding common shares of Evergreen for cash consideration of $0.605 per Evergreen share subject to any adjustments. As of December 6, 2022, Maverick has amended the agreement, Maverick would acquire 100% of the outstanding common shares of Evergreen for cash consideration of $0.63 per Evergreen share subject to any adjustments. As of December 6, 2022, Maverick revised the offer price to $0.65 per share. Both the transactions provides total consideration, subject to potential adjustment, of approximately $68 million. Maverick Gaming will acquire 7 million shares of Evergreen under the initial purchase agreement and remaining shares will be acquired under the arrangement agreement. Post completion of both transactions, which is anticipated to occur on the same day, Maverick Gaming will hold 100% stake in Evergreen. The Arrangement Agreement provides that if Evergreen's Closing Cash, is less than $26 million, then the total consideration payable to the Evergreen shareholders under the Transaction will be reduced proportionately, provided however that if Closing Cash is less than $20.6 million, there is no further reduction in the total purchase price beyond $5.4 million. If the total purchase price is reduced then the price payable for each share is reduced from $0.55. On November 23, 2022, Evergreen received an unsolicited non-binding proposal from TIL Gaming, LLC to acquire all issued and outstanding shares which Evergreen's Board of Directors determined as the ôSuperior Proposalö. If the sale contemplated by the Initial Purchase Agreement is completed and the Arrangement Agreement should subsequently fail to close for any reason, the sale under the Initial Purchase Agreement will be rescinded. Evergreen is entitled to terminate the Arrangement Agreement in order to enter into a definitive agreement with respect to a superior proposal, in which case Maverick is entitled to a termination fee of $2.5 million. Evergreen is entitled to a reverse break fee of $2.5 million in certain circumstances upon the termination of the Arrangement Agreement.
The Transaction is subject to approval by the Evergreen shareholders, court approval, completion of the Initial Acquisition and other closing conditions, including Closing Cash being not less than $28 million, receipt of required Washington State gaming approvals and the TSX Venture Exchange accepting the Arrangement Agreement for filing. As of November 30, 2022, the Closing Cash deal condition has been lowered to $25 million and also lowering the price adjustment threshold from $26 million to $23 million. The Transaction was unanimously approved at a meeting of the Evergreen Board of Directors and the Evergreen Board of Directors based on the unanimous recommendation from the Special Committee recommends that Evergreen shareholders vote in favour of the Transaction. The consideration is not subject to a financing condition. Shareholders who collectively hold or control approximately 78% of EvergreenÆs outstanding shares have entered into support agreements pursuant to which they have agreed to vote their shares in favour of the Transaction. The shareholders meeting of Evergreen Gaming Corporation is scheduled on November 24, 2022. The shareholders meeting of Evergreen Gaming Corporation is scheduled on December 8, 2022. The shareholders of Evergreen Gaming approved the transaction on December 8, 2022. As of December 14, 2022, the Supreme Court of British Columbia has issued a final order approving the plan of arrangement. The Transaction is expected to close by the end of 2022. The consideration secures immediate value for Evergreen shareholders.
Evans & Evans, Inc. is acting as financial advisor to Evergreen. Evans & Evans, Inc. acted as fairness opinion provider with a service fee of $12,500 to EvergreenÆs Board of Directors. Computershare Trust Company of Canada acted as transfer agent and Computershare Investor Services Inc. acted as depository bank to Evergreen. Alan Hutchison of Osler, Hoskin & Harcourt LLP and Michael Sullivan of Latham & Watkins LLP acted as legal advisors to Maverick Gaming LLC. Macias Gini & O'Connell LLP acted as accountant to Evergreen.