Earlier in 2016, Canadian gambling operator Amaya Inc. confirmed that founder, Chairman, and CEO David Baazov has expressed interest to take the company private. An official bid for the online gaming operator was expected to be made towards the end of February. No offer has been made so far although Mr. Baazov has repeatedly pointed out that he is still considering to buy the company for the amount of C$2.8 billion or C$21 per share and that he and his partners have been preparing a proposal.
Among other things, Amaya currently owns the Rational Group, which, in turn, owns PokerStars and Full Tilt, the world’s biggest card rooms. In fact, the two websites are soon to have their player pools merged. The Canadian giant acquired the popular poker brands following an unprecedented $4.9-billion deal, with Mr. Baazov being a figure in its completion.
Shortly after Amaya confirmed the executive’s interest in taking the company private, it revealed that Mr. Baazov has been negotiating the terms of the potential offer with a small number of interested investors. Some believed that Isai and Mark Scheinberg, the Rational Group’s former owners and founders, were probably among those potential investors. Amaya quickly denied the rumors, saying that there was a “very remote possibility” for the Scheinbergs to take part in the offer, if one is made at all.
Other reports emerged almost immediately, suggesting that Israeli businessman Teddy Sagi, founder of gaming developer Playtech, was among those who were interested to take part in a formal bid for the acquisition of the Canadian gambling giant. According to people familiar with the matter, Playtech’s participation in the deal would come as part of its strategy to spend £800 million in available funds to acquire major gambling businesses.
It is still unclear whether the developer of solutions for the international gambling industry would, indeed, be part of an offer for taking Amaya private, but industry experts have said that this was highly unlikely to happen. Although Playtech has obviously been longing to diversify its offering, it would not be easy for it to switch from software provider to online gambling operator, especially given the effort and investment that go for software development.
While awaiting for a formal proposal from Mr. Baazov and other potential investors, Amaya has found itself in the middle of quite an unpleasant situation. The Autorité des marchés financiers, Quebec’s financial securities regulator, announced recently that Mr. Baazov has been facing five different charges, including insider trading, related to his company’s acquisition of the Rational Group. The executive as well as other officials, employed at the company in the period between December 2013 and June 2014, have allegedly used privileged information about the Canadian company’s securities.
Following that latest announcement as well as the one regarding Mr. Baazov’s interest in taking Amaya private, the official announced this week that he would take an indefinite paid leave of absence from his posts as CEO and Chairman of the operator. He said that he would like to focus his attention on the official acquisition offer and to help the company keep itself away from distractions while he is contending the AMF’s allegations.
Amaya has appointed a Special Committee that will monitor closely everything related to the potential bid for its purchase. And despite the serious charges, the company has said that it fully supports its founder and believes that he will be able to clear his name.
It is still unclear whether Mr. Baazov will, indeed, make an offer for Amaya and whether that offer will result in a transaction being completed. And it is yet too early to say whether such a deal will be a good thing for the Canadian online gambling giant. However, an answer to all these questions is not likely to be found anytime soon. Yet, one thing is for sure – Amaya will most certainly continue making the headlines in the months to come and it will be interesting to keep an eye on how this will affect its operations as well as the industry as a whole.
