PokerStars owner Amaya says CEO proposes takeover

Mon Feb 1, 2016 10:59am EST
 
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By Amrutha Gayathri

(Reuters) - Canada's Amaya Inc (AYA.TO: Quote) (AYA.O: Quote), operator of online gambling website PokerStars, said it received a non-binding proposal from Chief Executive David Baazov to take the company private.

Amaya's shares were up about 27 percent at C$19.15 in morning trading in Toronto, but were still below Baazov's proposed offer of about C$21 per share.

The company's stock has more than halved in value in the past 12 months due to scrutiny of daily fantasy sports in the United States, delay in the launch of a sports-betting platform and legal worries.

However, the company could receive a major revenue boost if U.S. states such as California legalize online gambling over the next couple of years, Global Maxfin Capital analyst Manish Grigo said.

The proposal values Amaya at C$4.39 billion ($3.13 billion) on a fully diluted share basis as of Sept. 30.

Based on Amaya's basic share count, the proposed offer values the company at about C$2.8 billion, representing a premium of about 40 percent to the stock's Friday close on the Toronto Stock Exchange.

Grigo said Baazov could recover his investment over a period of time as a big portion of the revenue in the online gaming industry falls straight to the bottom line.

It was not immediately clear how Baazov, who currently owns about 18.6 percent of Amaya's outstanding common shares, would be financing the deal.   Continued...

 
The logo of gaming company Amaya Inc is seen at its head office in Montreal June 22, 2015. REUTERS/Christinne Muschi