Amaya gets offer from Baazov

Amaya Inc shares are trading higher this morning on news of a buyout offer that has been received from former executive David Baazov. The offer is to purchase the outstanding shares of AYA for $24 per share. Although the shares are up almost 15% today, they are trading at $21.05, which is signifigantly below the offer price, which represents the market’s determination of the odds this deal will actually go thru. Baazov’s offer is being backed by a group of hedge funds.

I believe AYA shareholders should reject the offer from Baazov and continue as a public company. AYA should continue developing its online gaming business as there is a lot more work to be done before this business matures.

Baazov pleads not guilty in insider trading charges

David Baazov presumably has a decent lawyer working on his behalf and so they must have done some informed calculations about what his chances would be at trial, and so since Baazov is pleading not guilty leads me to believe that the government’s case against him must be pretty weak.  This trial should be interesting.  It took regulators a long time to search for information and make charges.  I think this plea should be bullish for Amaya’s share price.

Ex-CEO of gaming company Amaya pleads not guilty to securities charges | Toronto Star

MONTREAL-The former head of online gaming company Amaya, two associates and three companies have pleaded not guilty to several securities-related charges following an investigation into allegations of insider trading, Quebec’s securities regulator said Monday.

Amaya CEO Charged with Insider Trading

Amaya Inc CEO faces five charges in insider trading probe by Quebec securities watchdog

The Quebec securities regulator has filed 23 charges stemming from its insider trading investigation into PokerStars owner Amaya Inc. David Baazov, the chief executive of Amaya, faces five charges for “aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya inc., and communicating privileged information,” the Autorité des marchés financiers said in a statement Wednesday.

Amaya Management Buyout?

Amaya shareholders have received a non-binding offer from our CEO to buy the remainder of the company’s shares for $21 per share.  AYA shares are currently trading well below the offer price, which means the market is skeptical a deal will get done.  It seems foolish for Amaya shareholders to sell at this point as there is so much more work and growth to do before realizing the value of Amaya global scale and brand.

PokerStars owner Amaya says CEO proposes takeover

(Reuters) – Canada’s Amaya Inc AYA.TO AYA.O, operator of online gambling website PokerStars, said it received a non-binding proposal from Chief Executive David Baazov to buy the company for about C$21 per share. Amaya’s U.S.-listed shares were up about 22 percent at $12.88 in premarket trading.

 

Amaya GVC Bwin Sale Update

Could Amaya Gaming be shut out of the sale process for Bwin.Party? Now that GVC looks more likely to bid by itself for Bwin after announcing GVC will raise 150 million pounds by issuing more share to the public and using the proceeds to re-ignite an offer for Bwin.Party. That GVC is considering going alone without the support of Amaya is bad news for Amaya shareholders. GVC seems to be getting good feedback from investment bankers regarding a secondary offering of their shares. This means investors see the benefits of a GVC/Bwin tieup without a Pokerstars connection, which means that one of the main benefits of of teaming up with Amaya (money) seems less important if GVC can raise the funds on its own.

Let’s say that GVC is able to raise money on their own and they beat out 888 for control of Bwin.Party, how will this change the online poker landscape?  Pokerstars would still be the dominant platform, and it would still be cutting into ancillary revenue from its competitors in the form of sports and casino games. But since network effects are so strong in online poker, a buyout of Bwin without Amaya would open the door for even greater consolidation and stronger competitors.  Its possible there could even be a tie-up between GVC/Bwin including 888 down the road.

Lurking in the background is Playtech’s iPoker white label platform, which would still be number 3 in the world by market share.  3rd party white label platforms are gaining more acceptance by operators in the online gaming market as the market matures and barriers to entry from technology and regulation continue to grow. I think iPoker is a bigger threat to Pokerstars than consolidation of smaller platforms as iPoker is a differentiated product.