David Baazov, former Amaya Chief Executive and Chairman, announced on Tuesday that he has decided to abandon his bid to buy the online gambling company and take it private. Mr. Baazov made an official offer for the Canadian gambling business in mid-November.
He proposed to acquire the company he had found himself for the approximate amount of C$3.5 billion or C$24 per common share. The businessman first said in a filing to the US Securities and Exchange Commission (SEC) that he had secured financial backing from four international investors. However, one of the named financial backers quickly denied any ties to Mr. Baazov and involvement in the proposed transaction.
As a result, the number of private equity firms supporting the deal was reduced to just two within a fortnight after said deal had first been announced. An investigation carried out by Canadian news outlet The Globe and Mail showed that the two remaining backers – Goldenway Capital SPC and Head and Shoulders Global Investment Fund SPC, had little to no experience in private equity investing.
Mr. Baazov said in his Tuesday statement that his decision to withdraw his takeover bid was based on the fact that certain company shareholders were demanding a purchase price he was not able to deliver. The company’s Board confirmed that transaction talks have been terminated.
Mr. Baazov’s approach to buy Amaya was publicly criticized by one of the gambling business’ largest shareholders – SpringOwl Asset Management LLC. The US hedge fund argued that the businessman’s bid undervalued the gambling company, particularly given the popularity and leadership position of its PokerStars brand and the growing potential of its online casino and sports betting brands. SpringOwl also recommended that Amaya’s Board reject the proposal as it was lacking in key details.
Mr. Baazov first manifested his interest in privatizing the gambling company back in February. The former Amaya CEO and Chairman then came under legal and media fire as he was charged with insider trading and other counts in relation to the $4.9-billion deal for the acquisition of Isle of Man-based Rational Group, owner of the PokerStars and Full Tilt brands. Being the subject of investigation, he vacated his executive posts at Amaya.
Despite his failed takeover bid, Mr. Baazov still remains the largest shareholder in the gambling operator. At present, he owns a 17% stake in Amaya.
