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David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars

02-01-2016 , 08:47 AM
"David Baazov, Chairman and Chief Executive Officer of Amaya Inc., today announced that he, together with a group of investors with whom he is in discussions, intends to make an all-cash proposal to acquire Amaya at a purchase price presently estimated at CDN$21.00 per common share, representing a 40% premium to Friday's closing price on the Toronto Stock Exchange."

"David Baazov currently owns 24,564,047 common shares of Amaya, representing approximately 18.6% of the issued and outstanding common shares, and options entitling him to acquire 550,000 additional common shares."

http://www.prnewswire.com/news-relea...567191321.html
02-01-2016 , 09:10 AM
So this would mean delisting the company from Nasdaq right? I know Baazov's name has a negative echo here but I'm going to go on a limb and say this will be a good thing.

Also, it can't potentially get any worse.
02-01-2016 , 09:14 AM
Presumably this will cause a big jump in the share price when it opens today?

Very strange anyway, not sure of the real reasons behind it.
02-01-2016 , 09:18 AM
It means to make the company private by buying out all outstanding public shares and removing it from the Toronto stock exchange. I would consider it the first step towards a company restructuring with the only possibility of return to a bigger stock exchange when the online gaming landscape has changed and the company needs a big cash infusion.
02-01-2016 , 09:21 AM
Stock market noob here. Considering how far the Amaya stock has dropped since it was listed, does Baazov make any money personally from the large difference in share price between when the company was listed and now since he's buying it at a much lower share price?
02-01-2016 , 09:23 AM
interesting comment from Alex Dreyfus about this potential deal: https://www.linkedin.com/pulse/break...-poker-dreyfus
02-01-2016 , 09:24 AM
more bizarre news and more ballsiness trying to take it private

Aren't there around 130 million shares outstanding.

Baazov owns 25 million.

So he needs to come up with ~105,000,000 * $21CDN = ~$2.2 billion to finance the deal, assuming current debt stays on books ?

Pretty sure his visa card and american express are already maxed out.
02-01-2016 , 09:33 AM
Quite the opposite. He'd be funneling even more money into the company to remove the burden of satisfying shareholder interests.

My guess is the majority of the shares are owned by institutional investors (banks and funds) and with the price so volatile and no long-term growth in sight it would ease the burden of taking on private equity investments from someone like Sheldon Adelson and remove the obstacles towards widespread legalization within the U.S. Without S.A. having a major hand in the legalization efforts, his lobbyists and donor money will prevent anything substantial. He's a business man, and while he is an opponent towards legalization, that position would definitely change when he has enough equity with the company who has the best software and platform to scale to millions of users. It's a completely new business model for him so he'd want a nice position to change his mind.

Last edited by gradx; 02-01-2016 at 09:39 AM.
02-01-2016 , 09:36 AM
The comments about grey markets like Canada and Russia are significant. A lot less scrutiny on a private company in that respect.
02-01-2016 , 09:39 AM
Quote:
Originally Posted by gradx David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
My guess is the majority of the shares are owned by institutional investors (banks and funds)
Yeah they look like investment funds to me, see here

http://quote.morningstar.ca/Quicktak...&culture=en-CA
02-01-2016 , 09:42 AM
Quote:
Originally Posted by SootedPowa David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
The comments about grey markets like Canada and Russia are significant. A lot less scrutiny on a private company in that respect.
More questions for me here.

Speaking from at least the U.S. standpoint, private companies and public companies are handled differently with licensing. Might work the same way in other markets, not sure.

In U.S. for a public company only directors, officers and any anyone owning more than 5-10% must get individual licenses.

For a private company, ALL owners must get individual licenses.

NJ Division of Gaming Enforcement heads just exploded.
02-01-2016 , 09:51 AM
Quote:
Originally Posted by PTLou David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
More questions for me here.
My knowledge is limited but PokerStars - and online gaming stocks in general -have some history here..

PokerStars were originally planning to float on the stockmarket (like PartyPoker) way back in 05/6. They were still in the planning stages when the UIGEA passed. They decided to stay in the now grey North American market and plans for flotation were shelved. They couldn't operate in an illegal market so blatantly and go public at the same time apparently.

Partypoker on the other hand were already floated on the stockmarket under the name PartyGaming and had to immediately withdraw from the USA on the passing of the UIGEA.

I am no expert but it seems to me Amaya are operating illegally in Russia, Australia and Poland as well as some significantly grey markets like Canada. There must be some bearing of that on this news today?
02-01-2016 , 10:05 AM
Quote:
Originally Posted by PTLou David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
more bizarre news and more ballsiness trying to take it private

Aren't there around 130 million shares outstanding.

Baazov owns 25 million.

So he needs to come up with ~105,000,000 * $21CDN = ~$2.2 billion to finance the deal, assuming current debt stays on books ?

Pretty sure his visa card and american express are already maxed out.
Haven't scrubbed the details of the debt, but usually comes with a change of control feature on them where they need to be repaid in a go private. Given where securities trade, if the debt has the standard put it will be exercised so he needs to raise the amount of the existing debt as well
02-01-2016 , 10:15 AM
Quote:
Originally Posted by am_man David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
Stock market noob here. Considering how far the Amaya stock has dropped since it was listed, does Baazov make any money personally from the large difference in share price between when the company was listed and now since he's buying it at a much lower share price?
This is a management-led Going Private transaction. Obviously, he believes the Market is undervaluing the company and is using the opportunity of its "undervalued' share price to buy the company at a discount to what he believes it is worth.

How he makes money in such a situation if successful is by keeping the cash flow which should be higher as it would be saving costs now spent related to being a public company, selling the private company later and pocketing the money, or bringing the company public again and pocketing the money.
02-01-2016 , 10:32 AM
i cant see how pokerstars at this point can get any worse. so doubt news are bad.
although who knows maybe he can indeed make it even worse somehow.
02-01-2016 , 10:50 AM
Shares in Amaya pop up a whopping 26% at open (trading at 19 a share roughly)
02-01-2016 , 10:52 AM
So if they pull this off, who got scammed besides players? It must have been all the rube idiots who got their f***in faces ripped off by Blackstone and Blackrock equity placements then, right? So now they take it private, gang-bankers collect another round of fees, then take it public again, more fees, dump the new stock issue on some more dementia ridden geriatric a**hat pensioners and other assorted retail sheep, rinse and repeat? Interesting. These guys are good.
02-01-2016 , 10:58 AM
I think that this action by David creates a floor in the price of the stock. The stock has been heavily shorted (look up the numbers) and the daily stock drop was creating a lot of pressure on management.

Today's move basically says look, if you want to short it, you might as well dig your own grave.

I don't think the company will go private, and especially not at $21 a share.

MrFan and the other short sellers will not be pleased by today's events.
02-01-2016 , 10:59 AM
Quote:
Originally Posted by betforu David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
A noob question but would amaya be making more money overall being as public company on the exchange, or would it make more money being run as a private company like the way it was run by the original owner?

Is it possible that amaya realize that running a poker company like pokerstars where they have share holders to answer to might not be the way to go and for this reason are looking to own the company outright and run pokerstars like it was run previously?
Look, when you are a public company, the markets eviscerate you if you miss your quarterly/yearly numbers. When you're private, you can afford to invest in verticals that take longer to see a reward.

Speak to any c level executive at a public company and they'll tell you the same thing.
02-01-2016 , 12:00 PM
This will kill Stars from coming back to the US market.
02-01-2016 , 12:07 PM
Quote:
Originally Posted by salesbeast David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
This will kill Stars from coming back to the US market.
Why?
02-01-2016 , 12:17 PM
Quote:
Originally Posted by restorativejustice David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
Why?
The US wanted over sight and regulation by taking it private this kills that happening.
02-01-2016 , 12:29 PM
Quote:
Originally Posted by SootedPowa David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
Presumably this will cause a big jump in the share price when it opens today?

Very strange anyway, not sure of the real reasons behind it.
One article speculates that it might be just a tactic to keep the stock price from falling. http://www.midasletter.com/2016/02/a...d-for-company/ If it is, it's working.

Does the high $21/share price seem suspicious to anyone? I don't have a lot of experience buying billion dollar corporations

Considering how low the price was wouldn't the smart move just be for him and his investors to start accumulating shares at the low price kind of like how someone attempting a hostile takeover might? Especially since this one isn't quite so hostile?

Actually purchasing stock would make the news seem more credible to me. They build up another 20-30% ownership and then it's easy to take the company private. That movement would also raise the price wouldn't it?

I've never walked into a store and seen a sign like "banana 2 for $1" and heard someone offer "I'll give you $5 for 8". What am I missing here?
02-01-2016 , 12:36 PM
Quote:
Originally Posted by salesbeast David Baazov (Amaya CEO) registers notice of intent to bid for acquisition of Amaya (PokerStars
The US wanted over sight and regulation by taking it private this kills that happening.
Would not be all that surprised to see NJDGE put a hold on the conditional licensing they extended if this bid progresses much further. They may also privately be fuming after putting in tens of thousands of man-hours carefully vetting the application only to have the entire chessboard upended just months after they issued their report. There's nothing impermissible about Amaya or Baazov engaging in these types of company actions...it's just not great from an optics perspective and won't win them any points with NJ.
02-01-2016 , 12:37 PM
Surprised no one pointed out that the headline here is completely incorrect, intends to make a non binding cash offer means nothing has happened yet but a POTENTIAL proposal. He hasn't acquired anything & if that offer never comes or the board doesn't approve it then the stock will implode right back down to 52w lows. Seems to have a put under the stock now & a nice short squeeze.

      
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