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Nov 14, 2016

Amaya shares rise after ex-CEO David Baazov makes $3.48B offer

Former Amaya CEO David Baazov

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Amaya Inc's (AYA.TO) former chief executive, David Baazov, has offered to buy the Canadian online gambling company in a deal valued at about $3.48 billion.

The offer price of $24 per share represents a premium of 30.9 per cent to Amaya's Friday close of $18.34.

The company's U.S.-listed shares (AYA.O) were up 16.9 per cent at US$15.90 in premarket trading.

Amaya said on Monday it would consider Baazov's offer, adding there was no assurance of a deal.

Baazov, who already owns about 17.2 per cent of Amaya, including options, said he made the offer on behalf of a to-be-formed entity led by him.

Four funds had committed US$3.65 billion to help the new entity buy Amaya, Baazov added.

Amaya said it would pay about US$200 million of the US$400 million deferred purchase price for its acquisition of the Rational Group in 2014, on or around Nov. 18.

The new entity will set aside US$200 million until its deal with Amaya goes through, and Baazov said if the deferred payment is due before the deal closes, the entity will release funds in advance.

Amaya, which owns gambling websites PokerStars and Full Tilt, said in February it had received a non-binding proposal from Baazov to take the company private. 

Two months after Baazov made the offer, he was charged with insider trading by Quebec's securities regulator, and the company said he was taking an indefinite paid leave of absence.

The charges followed an investigation into Baazov and other executives in 2014 for trading in Amaya's stock ahead of the company's US$4.9 billion takeover of PokerStars-owner Rational Group.

British bookmaker William Hill Plc and Amaya abandoned merger talks in October, after the deal was thrown into doubt when a leading investor in William Hill said it would oppose the plan.

Separately, Amaya reported a better-than-expected third-quarter profit as it added more customers.

The company raised its full-year adjusted share forecast to US$1.78-US$1.83 from US$1.71-US$1.82.

Amaya's net income from continuing operations was US$12.5 million, or 6 cents per share, compared with a loss of US$34.4 million, or 26 cents a share, a year earlier.

On an adjusted basis, Amaya earned 42 cents per share, beating the average analysts' estimate of 38 cents, according to Thomson Reuters I/B/E/S.

Amaya's total revenue rose 9.5 per cent to US$270.8 million from US$247.3 million, marginally higher than the average analyst estimate of US$270.1 million.

The company said its customer registrations increased by 1.9 million to about 105.5 million in the quarter.