Sci-Games boosts NYX stake in deal with The Stars Group


scientific-games-nyx-gaming-stars-group-share-purchaseUS gaming technology provider Scientific Games Corporation has increased its stake in rival NYX Gaming Group, in part via a transaction with the parent company of online poker giant PokerStars.

On Friday, Sci-Games announced that it had boosted its stake in the Toronto-listed NYX to just over 36% of that company’s issued and outstanding ordinary shares. Sci-Games, which as of last week held no stake whatsoever in NYX, announced earlier this week that it had acquired a 10.7% stake in NYX.

Sci-Games’ latest share purchase cost the company C$87.7m (US$69m), bringing Sci-Games’ total outlay this week to nearly C$115m. The deals also include share purchase warrants and exchangeable preferred shares, which, if fully exercised, would bring Sci-Games’ total NYX stake to 42.7%.

A hefty chunk of Sci-Games’ most recent NYX share purchase came via The Stars Group, the Toronto-listed parent company of PokerStars. Amaya Gaming, the Stars Group’s previous corporate identity, took a significant slice of NYX when Amaya sold its Chartwell and Cryptologic gaming software divisions to NYX in 2015.

According to the Stars Group, it reached a deal with Sci-Games on Thursday to sell its entire NYX holdings – including 5.6m ordinary shares, 40k preferred shares, and 1.36m ordinary share purchase warrants, which altogether represent 13.7% of NYX – to Sci-Games for a total consideration of C$35.5m (US$28m).

Stars is also eligible for a top-up payment should Sci-Games follow through on its plans to acquire all of NYX, if the price paid to NYX ordinary shareholders exceeds C$2.40 per share, or if Sci-Games aborts its takeover plans and sells off its NYX holdings for more than C$2.40 per share.

Sci-Games’ aggressive acquisition of a major position in NYX is intended to thwart efforts by UK bookmaker William Hill to block Sci-Games’ planned acquisition of NYX. Both Sci-Games and NYX have filed civil suits in the US against what they claim are Hills’ “anti-competitive, extortionate and coercive” tactics.

Hills holds an approximately 32% take in NYX after helping the latter company acquire sports betting technology provider OpenBet in 2016. OpenBet provides Hills’ sports betting platform, and the expected legalization of wagering in the US has Hills concerned about its future relationship with a Sci-Games-controlled OpenBet. NYX shareholders are scheduled to vote on the Sci-Games acquisition plan on December 20.