The proposed business combination between lottery firm Allwyn and blank-check company Cohn Robbins has been abandoned following accusations from a whistleblower. Consequently, Allwyn will persist as a privately owned entity for the time being, although it maintains a “steadfast” dedication to pursuing an initial public offering when market conditions are favorable.
The lottery administrator attributed the deal’s termination to “substantial” market instability, notwithstanding “robust” backing from investors. Apprehensions regarding inflation, interest rate fluctuations, and a prospective economic downturn have made investors apprehensive. This development follows commitments of nearly $700 million from investors in support of the merger.
In the wake of the unsuccessful merger, Allwyn will also defer its expansion initiatives in the U.S. until after it becomes publicly traded.
Robert Chvatal, Chief Executive Officer of Allwyn, remarked: “Allwyn received very positive feedback from numerous prominent investors, which reinforces our belief that the business holds significant appeal for the investment community. Nevertheless, considering the persistent and escalating volatility in the capital markets, both we and Cohn Robbins have resolved to discontinue the planned business combination. We express our gratitude to Gary Cohn and Cliff Robbins for their collaboration over the preceding year, and we anticipate collaborating with them again in the future.”
Recent outcomes demonstrate that Allwyn possesses strong cash flow generation and a robust financial and operational base. The company is advantageously situated to pursue both internal and external expansion strategies, as well as leverage emerging prospects.
“These prospects encompass the UK National Lottery, for which Allwyn will assume the role of operator in 2024. The company remains committed to pursuing sustainable and lucrative expansion and is enthusiastic about the potential within the lottery sector across Continental Europe, the UK, the US, and other regions.”
Allwyn recently formalized its acquisition of the aforementioned UK lottery operational rights following the withdrawal of legal challenges by the incumbent license holder, Camelot, and its technology partner, IGT.
Gary D. Cohn and Clifton S. Robbins, Co-Founders of Cohn Robbins, stated:
“Our collaboration with Allwyn was unveiled in January. Since then, we have observed a significant downturn in market sentiment, reaching a low point last week when the market recorded its most unfavorable single-day result since June 2020, with this pronounced negative trend persisting into the current week.
“Karel Komárek and his team at KKCG and Allwyn have established a highly commendable lottery-focused entertainment enterprise. Nevertheless, the enduringly unstable and unfavorable market environment has prompted a mutual decision with Allwyn to conclude the transaction. We extend our best wishes for their future undertakings.”
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