Amaya shares hit record high as regulators approve Rational buy

Tue Jul 29, 2014 11:53am EDT
 
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July 29 (Reuters) - Amaya Gaming Group Inc's shares rose more than 18 percent to a record high on Tuesday, after the Canadian company said it received approval from gaming regulators for its acquisition of PokerStars operator Rational Group.

Amaya said last month it would buy Rational, which owns and operates the world's biggest online poker company PokerStars, for $4.9 billion.

The approvals prompted analysts at Global Maxfin Capital to raise their target price on the stock to C$35 from C$30.

Amaya has said that the deal would expedite the entry of PokerStars into regulated markets, particularly the United States.

Online gambling was effectively outlawed in the United States until December 2011, when the Justice Department backed a court decision that said a 1961 law banning interstate sports betting did not apply to other forms of gambling.

Nevada, New Jersey and Delaware now offer some form of internet gambling, and eight other states considered legislation last year.

PokerStars paid $731 million in July 2012 to settle a money laundering lawsuit filed by the U.S. Department of Justice that contended the companies used fraudulent means to circumvent federal law and deceive banks into processing payments for them.

Rational also has online poker licenses in 10 countries including Belgium, Denmark, France and Germany.

Amaya also said on Monday that it had received conditional approval from the Toronto Stock Exchange to list its shares that will be issued to fund the deal.

The company's shares rose to a high of C$30.60 in morning trade, making them one of the top percentage gainers on the Toronto Stock Exchange. More than 2.3 million shares had been traded by 1130 ET. (Reporting by Ashutosh Pandey in Bangalore; Editing by Sriraj Kalluvila)