Zappia, who is a shareholder, is filing the lawsuit on behalf of multiple other investors, bringing a class-action lawsuit against the company. In his complaint, Zappia speaks about being “misled” by the company, including on specific matters that have established a “conflict of interest” and have been perceived as “material omissions.”
Case to Be Viewed ahead of Shareholder Meeting
The trigger is the forthcoming acquisition of GAN’s B2B and B2C divisions for $107.6 million by Sega Sammy, which was pitched last year and will now be decided on during a shareholder meeting on February 13, 2024.
According to Zappia, one of the issues with the negotiations has been a reduction in the tabled offer, which began at $2.51 per share but was finally settled for $1.97, citing the changing nature of business within GAN, and the fact that WynnBet, a North American sports betting operator, had left certain key markets.
Zappia’s case also requests access to several documents that can flesh out further details about the exact negotiations that led to the announcement of the proposed deal on November 7, 2023. Previous discussions had taken place on September 30, 2022, the lawsuit’s text alleges.
Zappia further raises an issue with both the Financing Special Committee and the Merger Special Committee, without enough clarity provided into both to know how the final prices were negotiated and hence the suggested material omissions. The complaint similarly alleges conflicts of interests of board members with the proposed transactions.
GAN Denies Wrongdoing of Any Sort
GAN for its part has already refuted the claims that its current or former members of the Board of Directors have been complicit with underhand practices that have done damage to the business for personal gain. All proceedings surrounding the suggested merger were conducted in line with due process, a SEC filing for GAN says, which details the case.
The Zappia v. Gan ltd. has been filed with the United States District Court for the Southern District of New York in January, as confirmed by the same SEC filing provided by the company. Other defendants named in the case are Seamus McGill, Michael Smurfit, David Goldberg, Susan Bracey, and Eric Green, as per the same filing.