Merger talks between PlayUp and CrossBet reportedly near completion
In a series of unexpected twists, Australian bookmaker PlayUp's potential acquisition deal with IG Acquisition Corp has collapsed. The deal, worth $399.7 million, was announced in September 2022, but failed to materialise by January 2023, as confirmed in an 8-K SEC filing.
The collapse of the deal is the latest in a string of close-run M&A transactions for PlayUp. The 2021 collapse of FTX's $450m purchase of PlayUp's US division is still being fought over in court.
The deal with IG Acquisition Corp was not the only potential transaction in jeopardy for PlayUp. Another deal, with the Israel-based AI advertising and marketing company AdRabbit, was also in doubt due to a New South Wales fine. However, public information suggests that any ongoing legal issues between PlayUp and AdRabbit regarding a reverse takeover or a New South Wales fine are not currently evident.
PlayUp's CEO, Daniel Simic, has found himself embroiled in legal issues. A judge ordered a forensic probe into his devices due to alleged breach of orders and potential tampering with key documents. Simic's actions are believed to have contributed to the termination of the SPAC deal and the liquidation of its trust.
The failure to deliver the required financial statements also played a significant role in the termination of the deal. Under the Business Combination Agreement (BCA), PlayUp was required to deliver audited financial statements by October 31, 2022, but failed to do so.
The fallout from the failed deal has not been limited to PlayUp. Moshe Cohen, the CEO of AdRabbit, has claimed that he did not authorise anyone to draft a letter stating the deal is in jeopardy or to affix his signature to it. Cohen has also denied writing such a letter himself.
In an effort to minimise risk from an ongoing lawsuit, PlayUp has retained the services of an expert to structure M&A deals. The company has also sued its ex-US CEO, Laila Mintas, for allegedly scuppering the deal.
The potential deal with CrossBet, another Australian bookmaker, remains two weeks away from completion. The details of this deal, whether it is a merger or the sale of certain assets, have not been disclosed.
The Nevada District has dismissed all claims against Laila Mintas, leaving the case solely about her $100m counterclaims against the business. The fate of PlayUp's M&A deals remains uncertain, but one thing is clear: the company is navigating through challenging times.
- The collapse of the deal between PlayUp and IG Acquisition Corp, worth $399.7 million, is the latest in a series of unsuccessful M&A transactions for the gaming operator.
- The failure of PlayUp to deliver audited financial statements by October 31, 2022, as required by the Business Combination Agreement (BCA), significantly contributed to the termination of the deal.
- In an attempt to avoid further legal issues and to structure future M&A deals, PlayUp has hired an expert to advise them.
- Despite the ongoing legal battles, PlayUp continues to pursue business opportunities, with a potential deal with CrossBet remaining two weeks away from completion.
