04/07/2010 12:00AM

Youbet shareholders approve Churchill merger

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Shareholders of Youbet.com have voted overwhelmingly to approve a merger of the company with Churchill Downs Inc., according to a Youbet release.

Approximately 98.4 percent of shareholder votes were in favor of the agreement, according to Youbet. Under the terms of the merger, each share of Youbet stock will be exchanged for approximately 1/20th a share of Churchill stock and 97 cents in cash, making the deal worth approximately $135 million.

The transaction still must be approved by the Justice Department, which is reviewing anti-trust concerns. Churchill already owns and operates Twinspires.com, the third-largest account-wagering operation in the country, and Youbet.com is the second-largest. The merger would make Churchill the dominant account-wagering operator in the U.S., surpassing Television Games Network.

Youbet announced the shareholder approval on Tuesday night. In after-hours trading, Churchill's share rose 20 cents, to $38.35, while Youbet's shares declined 15 cents, or 5 percent, to $2.85.