Amaya Founder Baazov Withdraws Bid for PokerStars Ownerby
Baazov says premium demanded by shareholders was too high
Amaya bid was backed by two Hong Kong-based fund groups
Amaya Inc. founder David Baazov withdrew his $4.1 billion bid to take the PokerStars owner private, saying the price sought by some shareholders was too high.
“It became evident that the share price premium demanded by certain shareholders exceeded the price at which my investors and I would be willing to complete a transaction,” Baazov said in a statement Tuesday.
Baazov’s C$24 a share cash bid had been recast after a Dubai-based investor said last month its purported backing for the deal announced Nov. 14 was given without the firm’s knowledge or consent. In a subsequent filing to the U.S. Securities and Exchange Commission, Baazov had said two Hong Kong funds -- Head and Shoulders Global Investment Fund SPC and Goldenway Capital SPC -- agreed to boost their support as a result.
Amaya plunged 5.3 percent to C$18.25 at 9:46 a.m. in Toronto, the biggest drop in a month, lowering its market value to C$2.66 billion ($2 billion).
The offer had been criticized by SpringOwl Asset Management, a U.S. activist investor that’s been boosting its stake in Amaya Inc., for being too low and lacking transparency. In an interview earlier this month, SpringOwl Chief Executive Officer Jason Ader had urged the company to shake off “the undue influence” of Baazov and focus on growing the business.
The announcement comes just two months after Amaya and William Hill Plc ended merger discussions, squelching one of the biggest possible deals in the betting industry after U.K. activist investor Parvus Asset Management opposed the union. The year also brought legal troubles to Baazov, who stepped down as CEO after he was charged in an insider trading probe by Quebec’s securities regulator. He has denied the allegations.
His deal to take Amaya private was worth about $6.7 billion including debt. Baazov is Amaya’s second-largest shareholder, with a 17 percent stake, according to data compiled by Bloomberg.