David Baazov has been forced to amend his bid for Amaya after it emerged that a proposed backer hasn’t actually put their chips on the table.
Following reports that KBC Aldini Capital, a Dubai-based investment firm, wasn’t part of the bid submitted by Baazov on November 14th, the status of the deal was thrown into chaos.
With Amaya’s share price taking a tumble, Baazov was forced to confirm that KBC was not a confirmed backer and that he would be submitting a revised offer in the coming days.
As much of the iGaming industry in the US took a break for Thanksgiving, Baazov was busy piecing together an amended bid for Amaya.
In addition to the removal of KBC from the $6.7 billion offer, Baazov’s updated proposal has also omitted Ferdyne Advisory Inc.
Asian Support for Baazov Remains Strong
Although there is no mention of why the British Virgin Island backer has been taken off the document, it seems that Baazov has now put the majority of his faith in two Hong Kong-based firms. Head and Shoulders Global Investment Fund SPC and Goldenway Capital SPC were both named on the original bid, but following the removal of two additional backers they are now on the hook for a larger portion of the offer.
According to Baazov, he now has “binding equity commitment letters” from both companies. To support these letters, Head and Shoulders chairman Stanley Choi recently gave a phone interview to members of the financial press where he said he would “continue to support” Baazov regardless of the recent news.
Of course, while Baazov and his backers might now be straight, that doesn’t mean an Amaya takeover is a done deal. While the offer of C$24 ($18) per share is favorable given a current share value of C$19 ($14), there are certainly more variables to consider.
Is Baazov’s Bet a Risk Worth Taking?
Despite being the largest shareholder in the company (17 percent), Baazov has proven to be something of a bad luck charm in recent months. An investigation by Quebec’s financial regulator has singled out Baazov and a small group of associates for potential insider trading.
These accusations not only forced Baazov to step down from his role as head of the company, but caused the company’s value to drop. Although slightly different circumstances, Baazov’s recent actions have had a similarly negative impact on the company and that could be a cause for concern for the current board.
Naturally, the size of the bid and the potential value of the company becoming a private entity could outweigh any black clouds that Baazov might bring. Indeed, when PokerStars (now a daughter company of Amaya) was a privately owned poker site, it was hugely successful.
While there’s no guarantee things would be the same if Amaya went private, it would allow the company to make bold decisions without answering to public shareholders. This could potentially pave the way for fresh innovations that would benefit players. But, this still might not be enough for the board to back Baazov.