Baazov ends Amaya buyout interest
Baazov ends Amaya buyout interest
The most ambitious, and arguably contentious, takeover attempt in online gambling attempted this year has come to an inglorious conclusion after former Amaya chief executive gave up on his $4.1bn takeover attempt blaming over-ambitious shareholder expectations.
Baazov was the architect behind Amaya’s original PokerStars acquisition and the takeover attempt was his bid to make a return to the Amaya boardroom after the ongoing insider trading investigation which brought to an end his previous tenure.
The failure of the bid is no surprise given how the original offer, tabled in November, appeared to unravel almost as soon as it was announced after one of the purported backers, an investment fund based in Dubai called KBC Aldini Capital, professed to never have heard of Amaya.
Subsequently, two of the other backers – Hong Kong-based investment firms Head and Shoulders Global Investment and Goldenway Capital – pledged to increase their offers but the damage appeared to have been done.
Within the past fortnight, Amaya shareholder Spring Owl – which has recently increased its stake in the firm – asserted that the offer was too low and was lacking in transparency. All that anyone was ever able to ascertain about the two investment firms was that one was run by a well-known poker player - Stanley Choi.
Jason Ader from Spring Owl, a man not afraid to voice his opinions on takeovers in the gambling space having made public statements in the past regarding the original BwinParty merger and then during its subsequent sale to GVC, said Amaya had to rid itself of the “undue influence” of its former boss.
In a terse statement, Amaya said that talks with Baazov had indeed been “terminated.” Baazov added a little more detail in his own press release, saying that during the discussions it had become evident that the share price premium demanded by “certain shareholders” was too rich for the tastes of his investors.
“After consulting with my advisors, I determined that the best course of action for me and Amaya would be for me to end my attempt to purchase the company,” he added.
Baazov remains the second-largest shareholder at Amaya with a 17 percent stake.
The ending of his bid now leaves Amaya once again without a suitor following the failure of the merger talks earlier in the year with William Hill. That attempt was nixed after William Hill’s shareholders, led by leading shareholder Parvus, baulked at the terms of the £4.6bn merger.
At the time of Amaya’s third-quarter results in November, released the same day as the Baazov new offer emerged, Amaya’s current chief executive Rafi Ashkenazi said the company had completed a strategic review and added that the firm would continue to look to execute on its priorities. In particular, the company was hoping to reverse “negative trends” affecting its poker business. In the three months to September, Amaya saw total revenues climb 9.5 percent year-on-year to C$270.8m while adjusted EBITDA rose 14 percent on the same basis to C$123.2m.
Totally Gaming says: To have pulled off a second buyout of PokerStars would have been some feat, even for the reported super-salesman David Baazov. But as he exits the stage it leaves open the question as to whether Amaya will remain an independent entity in 2017. Given the trends evident within the industry – consolidation against a backdrop of tightening margins – it seems likely the company will remain the subject of further acquisitive interest come the new year.