Former Amaya CEO Finds Hong Kong Investors To Aid Takeover

November 30, 2016 by Paul Butcher

David BaazovDavid Baazov erstwhile CEO of Amaya Inc has said that two Hong Kong based investment funds will increase their financial support for his takeover bid. Baazov made the offer to take Amaya private again earlier this month naming four investment funds as investors. His offer is for C$24 per share, a premium of roughly 30 percent over current share price.

An amendment was filed this week by Baazov to his earlier Securities and Exchange Commission (SEC) filing, revising funding details for the $4.1 billion bid. It showed the removal of two of the four backers originally mentioned – KBC Aldini Capital Limited and Ferdyne Advisory Inc.

The move comes after Dubai based KBC Aldini Capital Limited said that it was listed as a backer by Baazov without its knowledge or consent. The announcement by KBC gave a jolt to the company’s investors, resulting in a share price drop. No reason has been attributed to the removal of Ferdyne Advisory as an investor.

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Baazov now has stated that he has binding equity commitment letters from other two of the original financiers – Goldenway Capital SPC and Head and Shoulders Global Investment Fund SPC.

These two backers will be providing capital to a special purpose vehicle set up by Baazov for buying the Canadian based online gaming company which operates the world’s biggest online poker site, PokerStars.

So far, Baazov has gained investor commitments for $3.65 billion of the total $4.1 billion bid, with the remaining amount of $347 million being represented by his shares in Amaya. Amaya was founded by Baazov and he is currently the largest shareholder with 17 percent stake.

In a statement, Stanley Choi, chairman of Head and Shoulders Financial Group said, “We continue to support David Baazov.” Choi clarified that he was not concerned with the reports regarding KBC.

The deal also includes the acquisition of convertible preferred shares worth $1.15 billion and debt of $2.55 billion, taking the bid value to $6.7 billion. Also part of the deal is a separate provision of $200 million towards a deferred payment to owners of PokerStars which was acquired in 2014.

Amaya is yet to react to the amended filing. The company has been exploring various strategic options available to it. Recent discussions between the company and the UK bookmaker giant William Hill fell through after shareholder objections. Subsequently Amaya announced that remaining an independent entity was in the best interests of its shareholders. The takeover bid by Baazov is currently under review by the Amaya's Special Committee of independent directors.

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