Since November 14, the ongoing efforts of Amaya founder and former CEO David Baazov to acquire the Toronto-based online gaming firm and PokerStars’ parent company have made headlines seemingly every week.
When news broke that Baazov – the Amaya founder and leader of the bold acquisition of PokerStars in 2014 who was forced out this year amidst insider trading allegations – was pursuing an acquisition to take the company private, Amaya stock surged by 15 percent to CAD$21 per share.
In filings submitted to both the Toronto Stock Exchange and the U.S. Securities and Exchange Commission (SEC), Baazov claimed to have the financial backing needed to make a cash purchase of the roughly 80 percent of Amaya stock he doesn’t currently own. That acquisition – valued at CAD$3.65 billion at a price of C$24 per share – was said to be backed by four primary investors: Hong Kong-based Head & Shoulders Global Investment Fund and Goldenway Capital, British Virgin Islands-based Ferdyne Advisory, and Dubai-based KBC Aldini Capital.
On November 22, however, Toronto’s Globe and Mail reported that KBC founder Kalani Lal disputed Baazov’s assertion of financial backing. Per the report, Lal had never even spoken with Baazov, and KBC had already filed complaints over the fraudulent use of its company name:
“I don’t know who Amaya is. We have not given any commitment, nor have we had any discussions or any type of verbal communication.”
Baazov then refiled his claim with the SEC, listing only two backers: Head and Shoulders and Goldenway.
One day later, Baazov was forced to address Lal’s statement with a retraction, claiming that he had been deceived by somebody pretending to represent KBC.
On November 25, Goldenway’s Vice President of Operations Ricky Lai issued a statement pledging full support for Baazov’s bid:
“(We’re) prepared to increase our commitment if so required in order to conclude a successful transaction.”
As the situation progressed, a Boston-based investor filed a lawsuit claiming that Baazov intentionally included KBC in his filings – despite knowing he had no agreement in place – with a goal of manipulating Amaya’s stock price.
Shares of Amaya had climbed by 18 percent on the bid news, before plummeting for a full six percent reversal when KBC denied involvement.
With Amaya’s name and reputation seemingly at the whim of Baazov’s influence, shareholders expressed concern over the company’s current connection with the scandal-ridden CEO.
As reported by Bloomberg on December 5, investor and activist Jason Ader – owner of one percent of Amaya’s shares through his SpringOwl Asset Management firm – sent a letter to Amaya’s current CEO, calling for the company to distance itself from Baazov:
“It’s time for the company to fully move on from the undue influence of (Baazov), whose bid is a continued attempt by a discredited former executive to capitalize on the Amaya situation at other shareholders’ expense.”
If we have a credible bid with transparency, then we should consider it. But the current price seems low and the lack of transparency and the information about the sources of funding raises a lot of questions.
If I were making a $4 billion bid and would want the shareholders to take me seriously, I would provide much more transparency to the shareholders. (Amaya) needs to get back to growing the business.”
A spokesperson for Baazov responded by stating that the acquisition effort is ongoing.