David Baazov’s controversial bid to buy Amaya has taken another blow, this time from a shareholder in the Canadian gambling company. Jason Ader, CEO of investment management services provider SpringOwl Asset Management, said in a letter from late last week that Mr. Baazov’s offer undervalued Amaya and lacked in transparency.
Mr. Ader further elaborated that the bid should not be considered by the Board and that the gambling company, known to be the owner of online poker room PokerStars, among others, should part ways with Mr. Baazov as the latter had bad influence on it. According to the SpringOwl Chief Executive, the businessman had blemished the company’s reputation, referring to the insider trading allegations charged upon Amaya’s founder.
Mr. Baazov first announced intentions to buy the company in February. He remained silent on an official takeover bid up until mid-November. The period between February and November was quite tumultuous for Mr. Baazov to say the least. As noted above, he had been charged with insider trading in relation to the $4.9-billion deal for the acquisition of the PokerStars and Full Tilt Poker brands together with their parent company – The Rational Group.
That resulted in Mr. Baazov leaving his executive posts at Amaya. The businessman has presumably focused his attention on preparing a formal bid for buying the company and taking it private and finding financial backers. Four such backers were originally named in a filing to the US Securities and Exchange Commission. The filing was amended after one of the investors denied any involvement in the potential deal. This added further to what had already seemed a bid full of controversy and misinformation.
Mr. Ader said in his recent letter that the offer was not one that would do much good to Amaya or its shareholders. According to the businessman, the company would reap much more benefits, if it followed its growth strategy. In Mr. Ader’s opinion, the gambling operator should be focusing on further growing its newly launched online casino and sports betting divisions, and maintaining its leadership position in the online poker space.
Mr. Baazov offered a price of C$24 per ordinary share for Amaya, one that Mr. Ader deemed too low to be considered any further.
SpringOwl has recently increased its stake in Amaya to 2%. The gambling company has not responded to Mr. Ader’s letter but it will certainly be taken into consideration by the Board. Given the multiple issues related to the bid over the past weeks, it is rather doubtful that it would be recommended. Yet, Mr. Baazov has previously managed to do the unthinkable (e.g. to secure sufficient funds for the PokerStars acquisition), so his offer should not be excluded as impossible, or at least not yet.
