Item 1.01 Entry into a Material Definitive Agreement.
On
The Merger Agreement and the transactions contemplated therein (the "Acquisition") were (i) unanimously approved and declared fair to, advisable and in the commercial interests of DraftKings by the board of directors of DraftKings and (ii) unanimously approved and declared advisable and fair to, and in the best interests of, GNOG and its stockholders by the board of directors of GNOG (the "GNOG Board") acting upon the unanimous recommendation of a special committee of the GNOG Board (the "GNOG Special Committee").
Concurrently with the execution of the Merger Agreement, certain affiliates of
DraftKings and GNOG entered into that certain commercial agreement with respect
to expansion of market access, database access and marketing integrations of
DraftKings (the "Commercial Agreement"), and Draftkings entered into a support
and registration rights agreement (the "Support Agreement") with New DraftKings,
Fertitta,
The summary of the Merger Agreement and the transactions contemplated thereby in
this Current Report on Form 8-K are qualified by reference to the full text of
the Merger Agreement, which GNOG intends to file as an exhibit to a Current
Report on Form 8-K on or about
Merger Agreement
Transaction Structure & Merger Consideration
On the terms and subject to the conditions set forth in the Merger Agreement,
(a) at the Duke Effective Time (as defined in the Merger Agreement), Duke Merger
Sub will be merged with and into DraftKings in accordance with the Nevada
Revised Statutes (the "NRS"), with DraftKings becoming the surviving corporation
(the "
The Merger Agreement provides that upon the consummation of the Acquisition, each holder of GNOG Shares (a "GNOG Shareholder") will receive 0.365 (the "Exchange Ratio") of a share of New DraftKings Class A common stock (the "New DraftKings Class A Common Stock") for each GNOG Share issued and outstanding immediately prior to the Gulf Effective Time, other than any Excluded Shares (as defined in the Merger Agreement).
Each share of DraftKings Class A common stock ("DraftKings Class A Common Stock") issued and outstanding immediately prior to the Duke Effective Time will be cancelled, cease to exist and be converted into one validly issued, fully paid and non-assessable share of New DraftKings Class A Common Stock and each share of DraftKings Class B common stock issued and outstanding immediately prior to the Duke Effective Time shall be converted into one validly issued, fully paid and non-assessable share of New DraftKings Class B common stock.
Treatment of GNOG RSUs and GNOG Private Placement Warrants
At the Gulf Effective Time, each outstanding restricted stock unit (a "GNOG RSU") issued by GNOG will automatically and without any required action on the part of the holder thereof vest, then be cancelled and thereafter only entitle the holder of such GNOG RSU to receive (without interest) a number of shares of New DraftKings Class A Common Stock equal to (x) the product obtained by multiplying (i) the number of GNOG Shares subject to such GNOG RSU immediately prior to the Gulf Effective Time by (ii) the Exchange Ratio, less (y) a number of shares of New DraftKings Class A Common Stock equal to the applicable taxes required to be withheld with respect to such GNOG RSU settlement.
At the Gulf Effective Time, each outstanding warrant issued by GNOG ("GNOG Private Warrant") to purchase shares of GNOG Class A common stock ("GNOG Class A Common Stock") will automatically and without any required action on the part of the holder convert into a warrant to purchase a number of New DraftKings Class A Common Stock equal to the product of (x) the number of shares of GNOG Class A Common Stock subject to such GNOG Private Warrant immediately prior to the Gulf Effective Time multiplied by (y) the Exchange Ratio, and the exercise price of such GNOG Private Warrant will be determined by dividing (1) the per share exercise price of such GNOG Private Warrant immediately prior to the Gulf Effective Time by (2) the Exchange Ratio.
Treatment of DraftKings RSUs
At the Duke Effective Time, each outstanding restricted stock unit (a "DraftKings RSU") issued by DraftKings will automatically and without any required action on the part of the holder thereof, cease to represent a restricted stock unit denominated in one share of DraftKings Class A Common Stock and will be converted into a restricted stock unit denominated in one share of New DraftKings Class A Common Stock (a "New DraftKings RSU"). Except as specifically provided in the Merger Agreement, following the Duke Effective Time, each such DraftKings RSU will continue to be governed by the same terms and conditions (including vesting terms) as were applicable to the applicable DraftKings RSU immediately prior to the Duke Effective Time.
Representations and Warranties and Covenants
The Merger Agreement contains customary representations and warranties from
DraftKings, GNOG, New DraftKings and the Merger Subs, and each party thereto has
agreed to customary covenants, including, among others, covenants relating to
(1) the conduct of its business prior to the closing, (2) the use of reasonable
best efforts to consummate the Acquisition, (3) with respect to GNOG, delivering
to DraftKings, no later than
Among other things, the Merger Agreement also prohibits GNOG from soliciting competing acquisition proposals from third parties, except that, subject to certain exceptions and limitations, GNOG may provide information to, and negotiate with, a third party that makes an unsolicited bona fide acquisition proposal if the GNOG Board or the GNOG Special Committee determines in good faith after consultation with its outside legal counsel and financial advisor that (i) such acquisition proposal either constitutes or would reasonably be expected to result in a Superior Proposal (as defined in the Merger Agreement) and (ii) failure to take such actions would be inconsistent with the directors' fiduciary duties under applicable law (the "No-Shop Provision"). Upon notice of the receipt of a Superior Proposal by GNOG, DraftKings will have certain . . .
Item 7.01. Regulation FD Disclosure.
On
Attached as Exhibit 99.2 hereto and incorporated by reference herein is the
investor presentation dated
The information in this Item 7.01, including Exhibits 99.1 and 99.2, is furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of DraftKings under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information of the information in this Item 7.01, including Exhibits 99.1 and 99.2.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K may contain forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
and the Private Securities Litigation Reform Act of 1995, known as the PSLRA.
When used in this Current Report on Form 8-K, the words "estimates,"
"projected," "expects," "anticipates," "forecasts," "plans," "intends,"
"believes," "seeks," "may," "will," "should," "future," "propose" and variations
of these words or similar expressions (or the negative versions of such words or
expressions) are intended to identify forward-looking statements. These
forward-looking statements are not guarantees of future performance, conditions
or results, and involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside DraftKings's
control, that could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements. These forward-looking
statements include, without limitation, DraftKings's and GNOG's expectations
with respect to future performance and anticipated financial impacts of the
Acquisition, the satisfaction of the closing conditions to the Acquisition and
the timing of the completion of the Acquisition. These forward-looking
statements involve significant risks and uncertainties that could cause the
actual results to differ materially from the expected results. Most of these
factors are outside DraftKings's and GNOG's control and are difficult to
predict. Factors that may cause such differences include, but are not limited
to: (1) the outcome of any legal proceedings that may be instituted against
DraftKings and GNOG following the announcement of the Merger Agreement and the
transactions contemplated therein; (2) the inability to complete the
Acquisition, including due to failure to obtain approval of the stockholders of
DraftKings, approvals or other determinations from certain gaming regulatory
authorities, or other conditions to closing in the Merger Agreement; (3) the
occurrence of any event, change or other circumstance that could give rise to
the termination of the Merger Agreement or could otherwise cause the
transactions contemplated therein to fail to close; (4) the inability to obtain
or maintain the listing of New DraftKings Class A Common Stock on Nasdaq
following the Acquisition; (5) the risk that the Acquisition disrupts current
plans and operations as a result of the announcement and consummation of the
Acquisition; (6) the ability to recognize the anticipated benefits of the
Acquisition, which may be affected by, among other things, competition and the
ability of the combined company to grow and manage growth profitably and retain
its key employees; (7) costs related to the Acquisition; (8) changes in
applicable laws or regulations, particularly with respect to gaming, gambling,
sportsbooks, fantasy sports and other similar businesses; (9) the possibility
that DraftKings, GNOG or the combined company may be adversely affected by other
economic, business, and/or competitive factors, (10) market and supply chain
disruptions due to the COVID-19 outbreak or other epidemics, pandemics or
similar public health events; and (11) other risks and uncertainties indicated
from time to time in the information/prospectus relating to the Acquisition,
including those under "Risk Factors" in DraftKings's filings with the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number 99.1 Press Release, datedAugust 9, 2021 , issued by DraftKings Inc. andGolden Nugget Online Gaming, Inc.
*Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(b)(2)
of Regulation S-K.
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