DraftKings Listing Approved by Blank-Check Firm Shareholders

(Bloomberg) -- DraftKings Inc., the fantasy sports and betting site, has won approval from shareholders of a so-called blank-check company allowing it to go public through a reverse merger.

Shareholders of Diamond Eagle Acquisition Corp., a publicly traded special purpose acquisition company set up by Hollywood executive turned serial dealmaker Jeff Sagansky, approved the acquisition of DraftKings and SBTech Global Ltd., a developer of online betting platforms, according to people with knowledge of the matter. The combined company is expected to begin trading as soon as Friday, said the people, asking not to be identified because the matter isn’t public.

It will trade on the Nasdaq Global Market under the symbol DKNG, according to filings.

The company is going public at a time when major sporting events worldwide have been canceled to help contain the coronavirus pandemic. It’s unclear when sports matches will resume and what they will look like when they do.

Diamond Eagle raised $400 million in an initial public offering in May. Funds managed by Capital Research & Management Co., Wellington Management Co. and Franklin Templeton have committed to a private investment of $304 million in the combined company.

Representatives for DraftKings and Diamond Eagle declined to comment.

The three-party transaction, agreed to in December, valued the Boston-based fantasy sports company at $3.3 billion.

The SPAC price had been trading above the initial deal price and this IPO will open up this brand name in sports betting to a much bigger investor base starting Friday when trading begins, said Mina Faltas, founder and chief investment officer of Washington Harbour Partners LP, an early investor in DraftKings.

”Sports betting is one of the emerging growth areas that tech, media and consumer investors are spending more time on and DraftKings is the pure play on the U.S. opportunity,” he said.

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