Amaya Inc‘s former chief executive, David Baazov, has offered to buy the Canadian online gambling company in a deal valued at about $3.48 billion (US$2.56 billion).
The offer price of $24 per share represents a premium of 30.9 percent to Amaya’s Friday close of $18.34.
Baazov, who already owns about 17.2 percent of Montréal-based Amaya, including options, said on Monday 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 said. The funds are: Head and Shoulders Global Investment Fund SPC – HS Special Event Segregated Portfolio, Goldenway Capital SPC– Special Event SP, Ferdyne Advisory Inc and KBC Aldini Capital Ltd.
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 November 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 Québec’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 increased 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 percent 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.
Amaya’s Toronto-listed shares had risen 5.2 percent this year as of Friday’s close.
Update: Earlier this year, GSO Capital Partners LP, the credit arm of Blackstone Group, acquired 11 million common shares in Amaya.
The buy resulted from an exercise of warrants on Amaya shares bought by GSO in 2014, when the credit group contributed funding to Amaya’s acquisition of Rational Group.
(Reporting by Arathy S Nair and Vishaka George in Bengaluru; Editing by Martina D’Couto)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo of David Baazov courtesy of Reuters/Christinne Muschi