Zappia, a shareholder, is leading a class-action lawsuit against the company on behalf of multiple investors. He claims that the company misled investors and made material omissions which have created a conflict of interest. The lawsuit comes ahead of a shareholder meeting on February 13, 2024, where the acquisition of GAN’s B2B and B2C divisions for $107.6 million by Sega Sammy will be decided.
Zappia alleges that the initial offer of $2.51 per share for the acquisition was reduced to $1.97 due to changing business dynamics and WynnBet’s departure from certain markets. He is also requesting access to documents detailing the negotiations leading up to the proposed deal announced on November 7, 2023.
The lawsuit raises concerns about the Financing Special Committee and the Merger Special Committee, questioning the lack of clarity into how final prices were negotiated and alleging conflicts of interest among board members involved in the proposed transactions.
GAN has refuted these claims, stating that all proceedings surrounding the suggested merger were conducted in line with due process. The company denies any wrongdoing by its current or former members of the Board of Directors. The lawsuit, titled Zappia v. Gan ltd., was filed in January with the United States District Court for the Southern District of New York. Other defendants named in the case include Seamus McGill, Michael Smurfit, David Goldberg, Susan Bracey, and Eric Green.
Overall, the lawsuit brings to light the contentious acquisition and the alleged misleading and material omissions by the company, setting the stage for a legal battle leading up to the shareholder meeting in February 2024.