Monday is shaping up to be a good day for embattled online poker operator Amaya Inc. (TSX:AYA)(NASDAQ:AYA).
Former CEO and founder David Baazov has made an offer to take the company private at $24 per share. Baazov and a number of institutional investors will pay $4.1 billion for all outstanding shares--including Baazov’s ownership stake of 17%--as well as buying $1.15 billion worth of convertible preferred shares and assuming $2.55 billion worth of debt.
Since Baazov is so familiar with Amaya, the proposed deal has very few conditions. Notably, it doesn’t have a financing or due diligence clause.
If the deal goes through, Baazov would then resume his role of CEO. He took a leave of absence after he was accused in an insider trading probe back in March.
Amaya shares shot up as much as 17% in early trading on Monday, hitting $21.50 each.
The big gap between offer and current price exists for one big reason. Investors don’t really trust Baazov.
Amaya has been embroiled in an insider trading scandal which accuses Baazov of passing company secrets to outsiders through his brother, Josh. Regulators allege the insider trading was going on for years, and was especially active when Amaya announced it was acquiring PokerStars and Full Tilt Poker in 2014.
Baazov also offered to take Amaya private in February, but he couldn’t come up with the financing to complete his $21 per share bid. This bid does look to be more serious, but investors still remain skeptical.
