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The majority of GAN shareholders have given their approval for the upcoming acquisition of the firm’s B2B and B2C iGaming assets by Japanese gaming giant Sega Sammy.

In November 2023, GAN announced a $107.6m acquisition agreement with Sega Sammy, setting the company’s value at $1.97 per share.

During a shareholder meeting held yesterday (13 February), over 95% of votes cast were in favour of approving the merger agreement and the merger itself.

Roughly 51% of GAN’s issued ordinary shares as of 2 January, the record date for the meeting, were represented at the gathering.

In addition to greenlighting the merger, shareholders also gave a non-binding advisory approval for the compensation that may be paid or become payable to GAN’s named executive officers in connection with the merger.

The merger’s closure is anticipated to take place in late 2024 or early 2025, pending the fulfillment or waiver of specific closing conditions, including regulatory approval.

If the merger is completed, each GAN ordinary share issued immediately prior to the effective time of the merger will be automatically cancelled and converted into the right to receive $1.97 in cash per share.

Upon completion of the merger, GAN will cease to be a publicly traded company and will become a wholly owned subsidiary of Sega Sammy.

Class action

The shareholder approval comes shortly after Joseph Zappia, chief investment officer of LVW Advisors and a prominent GAN shareholder, filed a class action on behalf of himself and other investors.

Zappia alleged that GAN had misled investors through its proxy statement preceding the shareholder meeting.

The lawsuit outlined several instances where GAN purportedly failed to disclose conflicts of interest and omitted material information.

Among the grievances detailed in the complaint was the allegation that the initial offer was reduced from $2.51 per share to the final $1.97 per share due to concerns surrounding GAN’s business landscape, including the departure of one of GAN’s major B2B clients, WynnBet.

GAN, however, vehemently denied these allegations, asserting its adherence to legal standards and making additional disclosures to mitigate potential legal ramifications.

The lawsuit also questioned the transparency and composition of the committees involved in approving the acquisition, raising concerns about the secretive nature of the Financing Special Committee and the Merger Special Committee.

Moreover, Zappia’s legal team argued that GAN shareholders suffered “irreparable harm” due to the alleged material omissions and demanded a trial by jury to seek appropriate relief, although the exact amount was not specified in the complaint.

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