Former CEO of Amaya, David Baazov, has rescinded his offer of CA$24 per share to purchase the company and take it private. In a statement made by Baazov, he explained that, “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.”
Amaya released a short and cryptic statement of its own saying only that “Amaya Inc. (NASDAQ: AYA; TSX: AYA) confirmed today that discussions with its former Chief Executive Officer, David Baazov, regarding the offer to acquire Amaya by an entity to be formed, have terminated.”
Baazov’s tender of CA$24 per share was a 30 percent premium to the prevailing share price on Nov. 11. As soon as Amaya released their statement confirming the cancelled bid, shares fell back two percent and ended the day at CA$19.00. That represented a price that was 21 percent below Baazov’s bid.
Amaya owns the outstanding and lucrative brands of Full Tilt, PokerStars and BetStars. Prior to cancellation of the purchase bid, surely consideration was given to the notion that the lost share money could be made up with those world renowned brands. But given the acrimonious relationship between Amaya and Baazov, it’s doubtful that the share price was the only consideration.
SpringOwl Asset Management was instrumental in guiding Amaya through the potential sale. Jason Ader, SpringOwl CEO, not only objected to the price, but also to having any involvement to Baazov. He suggested that in order to prevent Baazov from influencing board members, Amaya should hold Baazov’s 17 percent share of the company in trust. Ader referenced Baazov’s insider trading charges that are still pending and the $870 million judgment by a Kentucky court that Amaya is still suffering from.
SpringOwl may feel that they did the right thing by convincing Amaya board members to terminate the sale. But now, in order to boost the share price, the board must work to show that rejection of a 30 percent premium offer was a good decision. Shareholders will be looking for new revenue growth over the next few quarters. If the stock price slides or stays stagnant, they will be looking to the board for new options.
This past year seems like one thing after another has been handicapping Amaya’s very potential growth prospects. Everything from the Kentucky ruling to the failed merger with William Hill and the Baazov circus, have all contrived to hold Amaya down. Shareholders are hoping the board can get things in order and get on with the job of building the company.