Barclays Appointed to Evaluate Amaya Takeover Bid

February 9th, 2016 | by Kaycee James

Barclays Capital Canada Inc. Amaya takeover bid

Any Amaya takeover bids by CEO David Baazov will be formally monitored and evaluated by Barclays Capital Canada Inc. (Image: Corey Hendrickson for Forbes)

The proposed Amaya takeover bid by current CEO David Baazov and his group of investors will be formally assessed and evaluated by Barclays Capital Canada Inc.

In a note sent out to the media on Monday, Amaya announced that Barclays Capital Canada Inc. and Blake, Cassels and Graydon LLP, a Toronto-based law firm, have been appointed to evaluate the takeover bid.

Barclays will act as Amaya’s exclusive advisor and evaluate an all-cash buy-out proposal from Baazov. Although the Amaya top exec hasn’t formally submitted a takeover bid, he did signal his interest to use a consortium of private investors to take control of the company he founded in 2004 in a filing made on February 2nd.

Baazov Leading the Bid

Baazov currently owns 24.6 million shares in Amaya, which is approximately 18.6 percent of the outstanding common shares within the company. Additionally, he has options to buy another 550,000 shares, although it’s expected he won’t exercise this option if he decides to move forward on his takeover bid.

Following the news that Barclays and Blake, Cassels and Graydon LLP will oversee Baazov’s bid, Amaya announced that four members of its senior management team will also be part of the process, but did not specifically name who they are.

To comply with its obligations as a publicly listed company, Amaya’s press release stressed that its special committee had neither “received nor solicited” a formal bid from Baazov. It also added that current shareholders are not required to do anything at this time.

Investigation Issues

Although a necessary statement in light of the recent news, Amaya and its senior managers will want to ensure that every part of a potential bid is both transparent and above board.

Following Amaya’s 2014 $4.9 billion takeover of PokerStars’ parent company, the Rational Group, Baazov and various senior employees, including chief executive officer Daniel Sebag, were investigated by Canada’s Autorité des marchés financiers (AMF).

Although the AMF never brought any charges against Amaya, the investigation did look at the sharp share price increase in the lead up to the purchase of Rational. The question was whether certain company insiders were privy to sensitive information regarding a potential takeover that might have allowed them to enjoy unfair trading conditions.

On July 1st of 2015, Amaya issued a statement that its own investigations hadn’t revealed any irregularities and that the AMF hadn’t filed any charges against the company. The statement went on to explain that it would cooperate with the AMF’s ongoing investigation, but that the company considered the case closed.

With this issue still recent in shareholders’ and the public’s mind, Amaya will want to avoid a repeat of that scenario. With that no doubt in mind, the company has pledged to “provide updates if and when necessary in accordance with applicable securities laws.”