he Pointe-Claire, Quebec-based company said in a statement it received a non-binding indication from Baazov that he’s in discussions with other investors to make an offer at C$21 a share. That’s 40 percent higher than the Jan. 29 closing price of C$14.99 a share. The shares jumped 27 percent to C$19 at 9:32 a.m. in Toronto.
Amaya soared after buying PokerStars in 2014, becoming the biggest player in the $4 billion global business of online poker. Yet the company fell back to Earth in 2015, when its Canadian- listed shares sinked 39 percent as it dealt with a strengthened U.S. dollar and exits from more than 30 markets where the legality of the business was unclear.
The board of Amaya has established a special committee of independent directors to review any proposal, as well as other alternatives that may be available, Amaya said. Baazov already owns almost 19 percent of the gaming company.
Maher Yaghi, a Montreal-based analyst with Desjardins Capital Markets, said the offer was below his fundamental value estimate for the company at C$28.50 a share. It is also well below its peak of C$37.28 a share last year.
“While some could see the offer as potentially being opportunistic, it is worth pointing out that the continued strength in the U.S. dollar is a potential headwind for the company’s European poker business,” Yaghi said in a note to clients Monday. “In addition, the company’s elevated leverage in an environment of increasing credit spreads is another factor for shareholders to consider.”
Amaya said the special committee hasn’t received nor solicited a formal bid, and there was no guarantee Baazov’s offer would result in a completed transaction.
Prior to acquiring PokerStars, Amaya was focused on providing products and services to other businesses in the gambling industry. The company was founded in 2004 as a maker of software for electronic poker tables.
Since becoming president and CEO of Amaya in 2006, Baazov has embarked on a strategy of growth through acquisition, picking up businesses that included online gambling software provider CryptoLogic and Cadillac Jack, a maker of traditional slot machines.