David Baazov Offers $3.13BN for Amaya and PokerStars
February 2, 2016 1:22 pmIn August 2014, Canadian company Amaya and its CEO David Baazov bought PokerStars for $4.4 billion, with the company’s share price rising as high as C$53 ($38) at one stage. Since then, Amaya’s share price has suffered a dramatic decline to just C$18 ($12.88) after having been hit by a number of setbacks, including a strong US dollar affecting its European poker business, a delayed sports book rollout, and a lawsuit levied by the state of Kentucky against PokerStars for $870 million.
In a surprise twist, David Baazov has now made a bid to buy back his own company for C$4.39 billion ($3.13bn) as he seeks to turn Amaya into a private firm once again. As a result, Baazov together with a group of investors has offered C$21 ($15) for each Amaya share, which is around $3 more than their market price was at the time of his bid.
In the short term, this has had the effect of boosting the company’s share price, which is currently trading at C$18, higher by 20% on the day. In the long run, returning PokerStars back to private trading would free the business from the constraints of having to report to shareholders before making major decisions, and thus pave the way forward for more positive sweeping changes to be made by Amaya.
This is an opinion shared by many experts in the industry, including Global Poker Index CEO Alex Dreyfus, who believes that the PokerStars brand has been negatively affected by the business having to pandor to the needs of its shareholders for short term returns, rather than the company being driven by a more long-term approach. Commenting on the news, Dreyfus explained:
“Innovation and growth need investment and taking risks. PokerStars has enough funds to invest, but had the obligation to show analysts immediate return. I can sense that with this financial move, David Baazov will re-invigorate the poker landscape.”