Amaya may not have received a formal takeover offer from its CEO David Baazov yet, but that hasn’t stopped the board from employing global independent investment bank Moelis & Company to value the company.
News of a potential takeover by Baazov hit the headlines last month, after he made a non-binding all-cash proposal to assume control of the gaming company. At that time, Baazov offered CDN$21 ($15) per share, which would have made the overall deal worth CDN$4.39 billion ($3.13 billion).
Despite his offer being C$3 above the share price at that time (C$18/$12), Baazov and a small group of private investors appeared to be happy at that price.
Commenting on the potential of paying over the odds for the company, Alex Dreyfus, the CEO of the Global Poker Index and Global Poker League, tweeted that “innovation and growth” require someone to take risks.
As of yet, however, Baazov hasn’t formally taken that risk.
Although a recent update from Amaya has shown signs that a formal offer is on its way, it seems no deal will be agreed until Moelis & Company have carried out an assessment of the gaming conglomerate’s finances.
“While February has come and gone, discussions with Mr. Baazov’s representatives give us confidence that a bid is likely to materialize,” said Kevin Wright, an analyst at Canaccord Genuity, a financial services company headquartered in Vancouver.
Once Moelis & Co. comes back with a valuation, it’s likely that Baazov will submit his formal offer.
On March 14, Amaya is due to publish its Q4 results for 2015, as well as its forecast for 2016. But with a potential takeover looming large, the company has decided to delay any financial projections for 2016 and simply publish its returns for the final quarter of 2015.
It’s clear that both parties have a number of hoops to jump through before a deal is agreed upon, but it seems the delay in coming to terms is negatively affecting Amaya’s share price.
Following the news that no formal offer had been received yet and an independent valuation was underway, the company’s price on the Toronto Stock Exchange dropped by 2 percent to C$19.50 ($14.50).
Apart from the financial implications of Baazov purchasing Amaya, the impact it will have on the poker community is unclear.
Since it took control of the popular site PokerStars in June 2014 for $4.9 billion, there have been a number of changes that have frustrated players.
Many of these changes have been motivated by a need for Amaya to appease its shareholders, as it’s a publicly traded company. Thus, Baazov’s possible privatization could be a positive thing.
With Baazov and his investors in control of the company, Amaya would become a private entity, giving the new board a license to make changes without having to consider the effect on share prices.
Meanwhile, we all wait for the other shoe, full of cash, to drop.