What an Amaya Inc buyout could mean for shareholders – FINANCIAL NEWS-ecozik.com
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What an Amaya Inc buyout could mean for shareholders

Amaya CEO David Baazov says he'll make a formal offer around the end of February.

MONTREAL – No media to work under about insider trading investigations, lawsuits and regulatory hurdles; no nervous shareholders to reassure, and fewer pressures for uninterrupted growth because the market undervalues the company – this could be the brand new reality for Amaya Inc. leader David Baazov if he goes ahead having a $2.8-billion bid to show the publicly listed online gambling giant into a private business.

Amaya Inc CEO to lead all-cash offer to purchase company for $21 a share

Shares of Amaya Inc. shot up nearly 27 percent within the first minute of trading Monday after chief executive David Baazov announced he and a group of investors are earning a bid to get the company that runs gambling online website PokerStars.

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For shareholders, it means they could eventually vote on whether to sell their stock at the $21 provided by Baazov along with a “small number” of investors – reasonably limited of about 40 per cent when compared with what it was before he announced his intentions on Feb. 1.

“He’s probably one or two puzzle pieces away from creating a web-based juggernaut, and if the market’s not likely to give him any value, he’ll go private and finish the puzzle, then spin this out once all of the headlines are gone,” said Cantor Fitzgerald Canada analyst Ralph Garcea in an interview using the Financial Post. 

“He’s a brilliant strategist.” 

Assuming Baazov makes a formal offer – that they says he promises to do round the end from the month – it will likely be up to and including special committee of directors to judge any takeover bids the Pointe-Claire, Que.-based company receives and give shareholders an opinion on valuation.

“Based on that opinion they’ll either recommend for or against tendering the shares,” said Phillip King, an attorney and professor at Western University’s Ivey Business School in London, Ont.

“If the opinion is that this company is more vital than what it’s trading at, the correct answer is entirely possible that shareholders can say this guy’s either likely to sweeten his offer or someone else will come along with a better offer.”

Analysts say another bidder is a possibility, especially as big players in the gambling industry continue a migration online.  

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