Luckbox operator Real Luck Group has rejected two proposals from Bragg co-founder Adam Arviv: one to sell the business and another to wind it down.
Real Luck said it received two proposals from Arviv, who it described as an “activist investor”.
The first was a merger with a “private gambling company”. This merger would have valued Luckbox at CA$0.09 per share, slightly below the CA$0.10 per share it closed at yesterday (27 October).
Luckbox claims that Arviv “then appeared to have changed his mind”, as he proposed a wind-down of Luckbox. The operator said that this proposal was “ignoring the group’s now finished platform and growing player base”.
Both, the Luckbox board said, “would not be in the best interests of the company and its shareholders”.
“Neither proposal reflects the value represented by the company’s significantly growing business and is also well below the company’s net cash position,” it said. “The company is undervalued. Real Luck Group has a strong cash position, no debt and a robust plan to reach profitability and scale in the next six-to-ten months.
“This makes the company an industry outlier and a target for individuals such as Mr. Arviv, seeking to gain access to the company’s cash, with no regard for its stakeholders. The board therefore has a duty to resist such opportunistic conduct.”
As a result, the Real Luck Group board said it retained the services of law firm McMillan LLP.
The board added that it was prepared to meet Arviv in his capacity as a shareholder, and said it had already attempted to set up a meeting that Arviv had declined.