David Baazov Withdraws Proposal to Purchase Amaya
The ownership of the Montreal-based company Amaya Incorporated has been a topic of discussion since the beginning of the year. For those of you not familiar with the name, Amaya Inc. is the operating company behind the extremely popular online poker domain PokerStars.com. In October, we saw well-known bookmaker from the United Kingdom – William Hill – in negotiations with Amaya Inc. about a merger, but in the end the two parties went their separate ways. Had that deal gone through, it could have led to the foundation of one of the world’s biggest online gambling companies.
Since February of this year, it has been the former CEO and chairman of Amaya Inc., David Baazov, who has shown active interest in purchasing the company. Baazov made numerous attempts to buy out Amaya but met with a number of obstacles along the way. The first of these obstacles came about in August when the Quebec securities regulator charged Baazov for allegedly giving out confidential information as an attempt to affect the market price of the firm’s stock. As a result, Baazov resigned from all of his positions at Amaya, but besides that, nothing too dramatic took place. Although the charges from Autorite Des Marches Financiers (AMF) were presented months ago, no verdict has yet been released.
Already being the company’s largest shareholder with ownership of about 17% of its stock, Baazov proceeded to issue a proposal to purchase the company along with other interested parties. This of course came as no surprise to people in the online gaming industry.
Updates about Baazov looking to buy out Amaya continued until recently, but his attempts have now officially come to an end as he abandoned the $6.7 billion deal this week. The withdrawal of Baazov from negotiations came amid accusations that some of the shareholders were demanding premiums that were higher than expected for their stakes in PokerStars.com, Amaya’s major asset.
In a statement, Baazov said, “The decision to terminate my attempted acquisition of Amaya [Incorporated] was not an easy one. I retained a full suite of advisors, arranged committed financing and engaged in constructive negotiations with Amaya [Incorporated’s] board of directors. I submitted an unconditional [and] fully financed offer of C$24 per share, higher than my original announced intention to submit a C$21 per share offer.”
Baazov’s bid was put together with four additional investors who had agreed upon binding equity commitments to purchase Amaya Incorporated. Amongst these investors was Goldenway Capital, a global investment firm based in Hong Kong. This assistance came in the form of an extra $3.45 billion to help Baazov complete the transaction.
So what happened and why didn’t the deal go through? Well, according to Baazov, “during the discussions it became evident that the share price premium demanded by certain shareholders exceeded the price at which my investors and I would be willing to complete a transaction,”
Baazov also stated, “After consulting with my advisors, I determined that the best course of action for me and Amaya [Incorporated] would be for me to end my attempt to purchase the company. As the founder of Amaya [Incorporated] this was not a decision I took lightly as it was always my intent to arrive at an outcome that was in the best interests of all shareholders. I wish my friends and former colleagues at Amaya [Incorporated] continued success in driving value for all shareholders.”
So it seems Amaya Inc. has lasted 2016 without having its ownership changed in any way. It will be interesting to see what the new year brings although as long as PokerStars.com maintains its level of service, we’re not sure we really care!
We wish all our readers a happy holiday season!