The planned merger between special purpose acquisition company (SPAC) IG Acquisition Corp (IGAC) and Australian betting operator PlayUp has been scrapped.
According to a letter addressed from IGAC to PlayUp dated 6 January 2023, the SPAC has decided to terminate a business combination agreement previously signed in September 2022.
Under the terms of the agreement, PlayUp was required to deliver its audited financial statements to IGAC no later than 31 October 2022.
However, “despite SPAC’s repeated requests for the company financial statements, the company has failed to deliver the company financial statements and has provided no indication of when the company financial statements will be delivered or if they will be delivered at all,” the letter read.
PlayUp also failed to provide a draft parent registration statement to IGAC, relating to a scheme implementation deed – an agreement between the two parties setting out key conditions for the merger.
IG Acquisition Corp: “Despite SPAC’s repeated requests for the company financial statements, the company has failed to deliver the company financial statements and has provided no indication of when the company financial statements will be delivered or if they will be delivered at all.”
Those breaches of previously agreed terms were considered sufficient reason for IGAC to terminate the agreement, as they “have caused undue delay and are not capable of being cured in a manner that would permit the closing to occur by the end date,” according to the letter.
Originally agreed on 22 September last year, the SPAC merger valued PlayUp at $350m and would have seen it list on Nasdaq at some point during the current quarter.
When the deal was first announced, IGAC said it believed the operator was uniquely positioned to build the first fully integrated technology platform where customers could engage in a variety of betting types, including daily fantasy, fixed-odds, casino, esports, lottery and sweepstakes, under a single account and digital wallet from any jurisdiction where such activities are permitted.
Now the deal has collapsed, IGAC will dissolve and liquidate on 11 January before redeeming all of the outstanding shares of class A common stock that were included in the units issued in its initial public offering.
The redemption price of the shares will be approximately $10.12 after taking into account the removal of a portion of the accrued interest in the trust account to pay taxes and for dissolution expenses.
As of the close of business on 11 January, the Public Shares will be deemed cancelled and will represent only the right to receive the redemption amount.
At the time the SPAC merger was first agreed, PlayUp had already failed in one attempted sale of the business, to the recently-collapsed cryptocurrency exchange FTX.
The collapse of that deal led to a drawn-out legal battle between the business and its former US CEO Dr. Laila Mintas, who was accused by PlayUp of deliberately scuppering the deal.
US courts determined, however, that Mintas had properly “exercised her executive responsibility and that she was turned into the scapegoat” for the failed acquisition agreement.
They also agreed that there was “substantial evidence” that her comments were not the reason behind the failed sale.
iGaming NEXT has contacted PlayUp for comment.
The ongoing case between gambling supplier PlayUp and its former US CEO could go to trial after a US court rejected an appeal by the company to enforce an injunction against Dr. Laila Mintas.
The case began in December 2021, after PlayUp accused Mintas of sabotaging a sale of the business to crypto exchange FTX by making disparaging comments to the buyer’s leadership team during negotiations.
A temporary restraining order against Mintas was subsequently granted by the US District Court for Nevada, after judge Gloria M. Navarro agreed with PlayUp’s claim that Mintas was in breach of her contract.
However, as the case developed, the district court subsequently denied a motion for a preliminary injunction against Mintas in January, causing PlayUp to lodge an appeal with the United States Court of Appeals for the Ninth Circuit – a federal court of appeals with jurisdiction over the district courts in nine states in the western US, including Nevada.
That court yesterday (18 July) upheld the district court’s ruling that PlayUp had not met the accepted requirements for a preliminary injunction.
Those requirements state that: “A plaintiff seeking a preliminary injunction must establish that [it] is likely to succeed on the merits, that [it] is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in [its] favour, and that an injunction is in the public interest.”
The court determined that PlayUp failed to meet several of those factors, namely the likelihood of its success based on the case’s merits.
An alternative standard based on a sliding scale may also be used in similar injunction cases, although the court ruled that PlayUp’s injunction request did not meet these alternate criteria either.
The full ruling can be read here.
PlayUp CEO Daniel Simic: “While PlayUp awaited the Ninth Circuit to reverse the decision, we are nonetheless pleased that the court made it very clear that the case in the US will be held on the merits at trial.”
Instead, the Court of Appeals supported the district court’s original ruling that it appeared “more likely” that Mintas had properly “exercised her executive responsibility and that she was turned into the scapegoat” for the failed acquisition agreement.
It also agreed that there was “substantial evidence” that her comments were not the reason behind the failed sale.
The court made clear, however, that it does not necessarily expect one party or the other to succeed on its merits if the case proceeds to trial. It merely concluded that the district court’s denial of PlayUp’s motion for preliminary injunction did not constitute an abuse of discretion.
Speaking to iGaming NEXT, PlayUp CEO Daniel Simic said: “While PlayUp awaited the Ninth Circuit to reverse the decision, we are nonetheless pleased that the court made it very clear that the case in the US will be held on the merits at trial.
“In the meantime, we are focussing on the swift progression of the separate proceedings presently underway in the US District Court (Nevada) and Australian Federal Court (where restraint orders are also currently in place).”
Amid the controversy of the case, PlayUp quietly revealed earlier this month that it was still exploring alternative options to the failed acquisition, “including strategic partnerships, a sale of the company or other possible transactions.”
Australian sports betting technology company PlayUp has quietly revealed that a potential sale or merger is back on the cards.
Last year, the company hit the headlines when a planned $450m acquisition by Bahamas-based crypto firm FTX never materialised.
What followed was a public blame game which ended with a series of lawsuits between then-US CEO Laila Mintas and global CEO Daniel Simic.
PlayUp accused Mintas of telling FTX-CEO Sam Bankman-Fried that PlayUp had systemic issues and was “not a clean company” while Mintas alleged that the deal fell through because Simic made unreasonable and unethical demands.
PlayUp is currently expanding its business in the US market and included the information about its renewed sale process at the end of a press release about its technology platform, which is currently working through completion of the certification process by Gaming Labs International (GLI).
The company said it has initiated a process to evaluate strategic alternatives and “intends to consider a full range of alternatives, including strategic partnerships, a sale of the company or other possible transactions”.
Innovation Capital LLC has been retained as its exclusive financial adviser to assist with the strategic review process.
PlayUp is already live in the US with a presence in New Jersey and Colorado with sports betting and across more than 25 states with its pooled betting real-money gaming product, Slots+.
The company’s betting, entertainment and sports technology (BEST) platform will allow users to have a single account, single wallet and single app in the US or Australia to make bets across all supported products. All BEST intellectual property is self-developed and owned by PlayUp.