Attached files
| file | filename |
|---|---|
| EX-2.1 - YOUBET COM INC | ex21to8k307554_11112009.htm |
| EX-4.2 - YOUBET COM INC | ex42to8k307554_11112009.htm |
| EX-10.2 - YOUBET COM INC | ex102to8k307554_11112009.htm |
| EX-10.1 - YOUBET COM INC | ex101to8k307554_11112009.htm |
| EX-10.3 - YOUBET COM INC | ex103to8k307554_11112009.htm |
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): November
11, 2009
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Youbet.com,
Inc.
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(Exact
name of registrant as specified in its charter)
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Delaware
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001-34276
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95-4627253
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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2600
West Olive Avenue, 5th Floor, Burbank,
CA
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91505
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (818)
668-2100
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(Former
name or former address, if changed since last
report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
x
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of
Merger
On November 11, 2009, Youbet.com, Inc.,
a Delaware corporation (“Youbet”), entered into an Agreement and Plan of Merger
(the “Merger Agreement”) with Churchill Downs Incorporated, a Kentucky
corporation (“Churchill”), Tomahawk Merger Corp., a Delaware corporation and
wholly owned subsidiary of Churchill (“Merger Corp”), and Tomahawk Merger LLC, a
Delaware limited liability company and wholly owned subsidiary of Churchill
(“Merger LLC”). The Merger Agreement provides that, upon the terms and subject
to the conditions set forth in the Merger Agreement, (i) Merger Sub will merge
with and into Youbet, with Youbet surviving as a wholly owned subsidiary of
Churchill (the “Merger”) and (ii) following completion of the Merger, the
surviving corporation from the Merger will merge with and into Merger LLC (the
“Subsequent Merger”), with Merger LLC surviving the Subsequent
Merger.
Subject to the terms and conditions of
the Merger Agreement, which has been unanimously approved and adopted by the
boards of directors of both Youbet and Churchill, at the effective time of the
Merger (the “Effective Time”), each share of Youbet common stock (“Youbet Common
Stock”), par value $0.001 per share, issued and outstanding immediately prior to
the Effective Time (other than treasury shares of Youbet, shares of Youbet
Common Stock held by a wholly owned subsidiary of Youbet or shares of Youbet
Common Stock held by Churchill or any of Churchill’s subsidiaries) will be
converted into the right to receive (i) 0.0598 of a share (the “Exchange Ratio”)
of Churchill common stock (“Churchill Common Stock”), no par value and (ii)
$0.97 in cash (together, the “Merger Consideration”), subject to adjustment to
ensure that the Merger does not require Churchill to issue more than 19.6% of
the outstanding Churchill Common Stock outstanding as of immediately prior to
the Effective Time. No fractional shares of Churchill Common Stock will be
issued in the Merger, and Youbet’s stockholders will receive cash in lieu of
fractional shares, if any, of Churchill Common Stock.
Each outstanding vested and unvested
Youbet stock option will be canceled at the Effective Time and the holders of
such options that are in the money will receive a mix of cash and Churchill
stock, in the same proportion that each such optionholder would have received if
such optionholder was a Youbet stockholder, based upon the amount by which $0.97
plus the
product of (i) 0.0598 and (ii) the closing price of Churchill’s common stock on
The NASDAQ Stock Market on the day immediately prior to the date of the
Effective Time exceeds the exercise price of each such Youbet stock
option.
Youbet has made customary
representations, warranties and covenants in the Merger Agreement, including,
among others, covenants to conduct its business in the ordinary course during
the interim period between the execution of the Merger Agreement and
consummation of the Merger. Churchill has made certain
representations, warranties and covenants in the Merger Agreement.
Youbet is also subject to a “no-shop”
restriction on its ability to solicit alternative acquisition proposals, provide
certain information and engage in discussions with third parties, subject to
certain exceptions. The Merger is also subject to customary closing
conditions, including (i) approval and adoption by Youbet’s stockholders of the
Merger Agreement, (ii) the expiration or termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act, (iii) receipt of tax opinions
from counsel to Churchill and Youbet, (iv) effectiveness of Churchill’s
Registration Statement on Form S-4 covering shares of Churchill Common Stock to
be issued pursuant to the Merger, (v) absence of litigation or injunctions
prohibiting the transactions contemplated by the Merger Agreement and (vi)
subject to certain materiality exceptions, the accuracy of the representations
and warranties made by Churchill and Youbet, respectively, and compliance by
Churchill and Youbet with their respective obligations under the Merger
Agreement. The Merger Agreement also provides for certain termination rights for
both Churchill and Youbet, including Youbet’s right to terminate the Merger
Agreement under certain circumstances to enter into a “Superior Proposal.” Upon
termination of the Merger Agreement under specified circumstances, Youbet may be
required to pay Churchill a termination fee of $4,326,000 and reimburse
Churchill’s transaction expenses up to $500,000 and Churchill may be required to
pay Youbet a termination fee of $5,000,000.
The Merger and the Subsequent Merger,
considered together as a single integrated transaction for United States federal
income tax purposes along with the other transactions effected pursuant to the
Merger Agreement, are intended to qualify as a “reorganization” within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended. The Merger Agreement also provides that Churchill will
appoint, as of the Effective Time, one designee of Youbet to the Board of
Directors of Churchill.
The foregoing summary of the Merger
Agreement is qualified in its entirety by the terms and conditions of the Merger
Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and
is incorporated herein by reference. The Merger Agreement, which has been
included to provide investors with information regarding its terms, contains
representations and warranties of each of Churchill, Merger Corp, Merger LLC and
Youbet. The Merger Agreement is not intended to provide any other factual
information about Churchill, Merger Corp, Merger LLC or Youbet. The assertions
embodied in those representations and warranties were made for purposes of the
Merger Agreement and are subject to qualifications and limitations agreed to by
the respective parties in connection with negotiating the terms of the Merger
Agreement. In addition, certain representations and warranties were made as of a
specific date, may be subject to a contractual standard of materiality different
from what might be viewed as material to stockholders, or may have been used for
purposes of allocating risk between the respective parties rather than
establishing matters as facts. Accordingly, you should not rely on the
representations and warranties in the Merger Agreement as characterizations of
the actual state of facts about Churchill, Merger Corp, Merger LLC and Youbet.
Investors should read the Merger Agreement together with the other information
concerning Churchill and Youbet that each company publicly files in reports and
statements with the Securities and Exchange Commission.
Amendment to Rights
Agreement
In connection with the execution of the
Merger Agreement, on November 11, 2009, Youbet amended its Rights Agreement (as
defined below). A description of the amendment to the Rights Agreement is set
forth in Item 3.03 of this Current Report on Form 8-K and is herein
incorporated by reference.
Forward
Looking Statements
This communication contains certain
forward-looking statements. These forward-looking statements, which are included
in accordance with Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, may include, but
are not limited to, statements about the benefits of the proposed transaction,
including future financial and operating results, the combined company’s plans,
objectives, expectations and intentions. These statements are subject to a
number of known and unknown risks, uncertainties and other factors that may
cause Youbet’s actual results and performance in future periods to be materially
different from any future results or performance suggested by the forward
looking statements in this communication. Although Youbet believes the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that actual results will not
differ materially from these expectations. Important factors that could cause
actual results to differ materially from those in the forward looking statements
include the possibility that the expected efficiencies and cost savings from the
proposed transaction will not be realized, or will not be realized within the
expected time period; the ability to obtain governmental approvals of the merger
on the proposed terms and schedule contemplated by the parties; the failure of
Youbet’s stockholders to approve the proposed merger; the risk that the
Churchill and Youbet businesses will not be integrated successfully; disruption
from the proposed transaction making it more difficult to maintain business and
operational relationships; the possibility that the proposed transaction does
not close, including, but not limited to, due to the failure to satisfy the
closing conditions; the timely development and market acceptance of
new products and technologies; Youbet’s ability to achieve further cost
reductions; increased competition in the advance deposit wagering business; a
decline in the public acceptance of wagering; wagering ceasing to be legal in
jurisdictions where Youbet currently operates; the limitation, conditioning, or
suspension of any of Youbet’s licenses; increases in or new taxes imposed on
wagering revenues; the adoption of future industry standards; the loss or
retirement of key executives; Youbet’s ability to meet its liquidity
requirements and maintain its financing arrangements; and general economic and
market conditions; as well as the risks and uncertainties discussed in Youbet’s
Form 10-K for the year ended December 31, 2008, and in Youbet’s other filings
with the Securities and Exchange Commission (the “SEC”). Readers are cautioned
not to place undue reliance on forward-looking statements, which speak only as
of the date of this communication. Youbet does not undertake, and specifically
disclaims any obligation, to publicly release the result of any revisions that
may be made to any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements. See Churchill’s and Youbet’s Annual Reports on Form 10-K for the
fiscal year ended December 31, 2008 and other public filings with the SEC for a
further discussion of these and other risks and uncertainties.
Important
Merger Information and Additional Information
This communication is being made in
respect of the proposed merger transaction involving Churchill and Youbet. In
connection with the proposed transaction, Churchill will file with the SEC a
registration statement on Form S-4 and Youbet will mail a proxy
statement/prospectus to its stockholders, and each will be filing other
documents regarding the proposed transaction with the SEC as well. BEFORE MAKING
ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT
DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final
proxy statement/prospectus will be mailed to Youbet stockholders. You may obtain
copies of all documents filed with the SEC concerning this proposed transaction,
free of charge, at the SEC’s website (www.sec.gov), by accessing the Churchill
website at www.churchilldownsincorporated.com under the heading “Investor
Relations” and then under the link “SEC Filings” or from Churchill by directing
a request to 700 Central Avenue, Louisville, KY 40208. Alternatively, you may
obtain copies by accessing Youbet’s website at www.Youbet.com under the heading
“Investors Relations” and then under the link “SEC Filings” or from Youbet by
directing a request to 5901 De Soto Avenue, Woodland Hills, CA
91367.
Churchill and Youbet and their
respective directors and executive officers and other persons may be deemed to
be participants in the solicitation of proxies in respect of the proposed
transaction. Information regarding Churchill directors and officers is available
in Churchill’s proxy statement for its 2009 annual meeting of shareholders and
Churchill’s 2008 Annual Report on Form 10-K, which were filed with the SEC on
April 28, 2009 and March 4, 2009, respectively. Information regarding Youbet
directors and executive officers is available in Youbet’s proxy statement for
its 2009 annual meeting of stockholders and Youbet’s 2008 Annual Report on Form
10-K, which were filed with the SEC on April 30, 2009 and March 6, 2009,
respectively. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by
security holding and otherwise, will be contained in the proxy
statements/prospectus and other relevant materials to be filed with the SEC when
they become available.
Item 3.03. Material
Modification to Rights of Security Holders.
Amendment to Rights
Agreement
In
connection with the execution of the Merger Agreement, on November 11, 2009,
Youbet entered into an amendment (the “Rights Amendment”) to the Rights
Agreement, dated as of March 31, 2009, between Youbet and American Stock
Transfer & Trust Company LLC, a New York limited liability trust company, as
Rights Agent (the “Rights Agreement”). Pursuant to the Rights
Amendment, neither Churchill nor any of its affiliates or associates will be
deemed an “Acquiring Person” for purposes of the Rights Agreement as a result of
the Merger Agreement or any of the transactions contemplated thereby.
Additionally, none of these events will cause the rights issued under the Rights
Agreement to be distributed, become exercisable or result in any rights becoming
void or an adjustment to the number or types of securities issuable upon
exercise of the rights. The Rights Amendment also provides that the Rights
Agreement shall be terminated and be of no further force and effect as of the
Effective Time.
The
foregoing description of the Rights Amendment does not purport to be complete
and is qualified in its entirety by reference to the Rights Amendment, a copy of
which is filed as Exhibit 4.2 hereto and is incorporated herein by
reference.
Item 8.01. Other
Events.
Voting Agreements
In connection with the Merger
Agreement, on November 11, 2009, Churchill also entered into Voting Agreements
with (i) Lloyd I. Miller III, a significant stockholder of Youbet (“Miller”),
(ii) New World Opportunity Partners I, L.P., a significant stockholder of Youbet
(“New World”) and (iii) each of the directors of Youbet in their capacity as
stockholders of Youbet (together, the “Voting Agreements”). Shares of Youbet
Common Stock owned by the Youbet stockholders subject to the Voting Agreements
constituted approximately 24% of the total issued and outstanding shares of
Youbet Common Stock as of November 11, 2009. Pursuant to the terms of the
applicable Voting Agreements, New World and each of the directors of Youbet have
agreed to vote all of the shares of Youbet Common Stock owned or held by them in
favor of the Merger Agreement and the transactions contemplated
thereby. Pursuant to his Voting Agreement, Miller has agreed to vote
the shares of Youbet Common Stock over which he has sole voting and dispositive
power in favor of the Merger Agreement and the transactions contemplated thereby
and, with respect to the shares of Youbet Common Stock that he has shared voting
and dispositive power, to take commercially reasonable efforts, consistent with
his duties and responsibilities as an investment advisor and otherwise
consistent with applicable law, to recommend to the trustee for such shares that
the trustee vote the shares of Youbet Common Stock for which Miller acts as an
investment adviser in favor of the Merger Agreement and the transactions
contemplated thereby.
Each Voting Agreement will remain in
place until the earlier of (i) completion of the Merger, (ii) termination of the
Merger Agreement, (iii) written notice from Churchill to the stockholder
terminating the Voting Agreement or (iv) an amendment to the Merger Agreement
that results in a reduction to the consideration to be received by the
stockholder or otherwise materially adversely affects such
stockholder.
Each stockholder party to a Voting
Agreement is subject to a customary “lock-up” provision with respect to their
shares of Youbet Common Stock during the term of the Voting Agreement, as well
as an additional three-month “lock-up” period following completion of the Merger
with respect to the shares of Churchill Common Stock issued to such stockholder
in connection with the Merger. Each non-director Youbet stockholder
party to a Voting Agreement is also subject to a customary non-solicitation
covenant during the term of the Voting Agreement.
The
foregoing summary of the Voting Agreements is qualified in its entirety by the
terms and conditions of the Voting Agreements, which are filed as Exhibits 10.1,
10.2 and 10.3 to this Current Report on Form 8-K and are incorporated herein by
reference.
Item
9.01. Financial
Statements and Exhibits.
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(d)
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Exhibits
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2.1
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Agreement
and Plan of Merger, dated as of November 11, 2009, among Churchill Downs
Incorporated, Youbet.com, Inc., Tomahawk Merger Corp. and Tomahawk Merger
LLC
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4.2
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Amendment
to Rights Agreement, dated as of November 11, 2009, between Youbet.com,
Inc. and American Stock Transfer & Trust Company LLC
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10.1
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Voting
Agreement, dated as of November 11, 2009, between Churchill Downs
Incorporated and Lloyd I. Miller III
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10.2
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Voting
Agreement, dated as of November 11, 2009, between Churchill Downs
Incorporated and New World Opportunity Partners I., L.P.
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10.3
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Form
of Voting Agreement, dated as of November 11, 2009, between Churchill
Downs Incorporated and each director of Youbet.com, Inc.
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SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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Dated:
November 13, 2009
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By:
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/s/
David Goldberg
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Name:
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David
Goldberg
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Title:
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President
& Chief Executive Officer
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EXHIBIT
INDEX
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Exhibit No.
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Description
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2.1
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Agreement
and Plan of Merger, dated as of November 11, 2009, among Churchill Downs
Incorporated, Youbet.com, Inc., Tomahawk Merger Corp. and Tomahawk Merger
LLC
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4.2
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Amendment
to Rights Agreement, dated as of November 11, 2009, between Youbet.com,
Inc. and American Stock Transfer & Trust Company LLC
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10.1
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Voting
Agreement, dated as of November 11, 2009, between Churchill Downs
Incorporated and Lloyd I. Miller III
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10.2
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Voting
Agreement, dated as of November 11, 2009, between Churchill Downs
Incorporated and New World Opportunity Partners I., L.P.
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10.3
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Form
of Voting Agreement, dated as of November 11, 2009, between Churchill
Downs Incorporated and each director of Youbet.com,
Inc.
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