Canada's Gateway Casinos to gain public listing via merger with shell firm

(Reuters) - Canadian gaming and entertainment operator Gateway Casinos & Entertainment Ltd on Friday said it would merge with a publicly traded shell company in a deal with an enterprise value of $1.12 billion.

Leisure Acquisition Corp LACQU.O, a special purpose acquisition vehicle, will merge with Gateway and become a new subsidiary of Gateway's holding company GTWY Holdings Ltd, the companies said in a statement.

The complex transaction will allow Gateway to go public while sidestepping the traditional initial public offering process.

The casino operator had initially filed paperwork for a U.S. initial public offering in November 2018 but pulled its long-delayed IPO plans earlier Friday, according to a regulatory filing here.

The company has over two dozen gaming properties in British Colombia, Ontario and Edmonton.

After the deal closes, Gateway’s shares will trade on the New York Stock Exchange under the ticker “GTWY.”

A special purpose acquisition vehicle SPAC uses proceeds from an IPO, together with borrowed funds, to acquire companies that are usually privately held.

Through the deal, Gateway will be able to avoid struggling to sell shares to investors in an uncertain IPO climate.

Morgan Stanley acted as M&A adviser to Gateway, and Credit Suisse advised Leisure.

Reporting by Bharath Manjesh in Bengaluru; Editing by Cynthia Osterman