David Baazov Drops Amaya Bid - Shareholders Want Too Much

Amaya Inc. founder David Baazov announced that he’s withdrawing his $4.1 billion bid to buy his former company and take them private.

Baazov says the reason why he’s withdrawing his bid is because certain shareholders were asking for too much for Amaya, which owns PokerStars. The $4.1 billion bid is valued at $6.7 billion when ing for the company’s debt.

“It became evident that the share price demanded by certain shareholders exceeded the price at which my investors and I would be willing to complete a transaction,” Baazov explained.

Bloomberg reports that Baazov’s C$24 bid per share was re-evaluated after his alleged Dubai-based investor said that they had no knowledge of Baazov’s $4.1 billion bid.

A subsequent filing to the U.S. Securities and Exchange Commission shows that Baazov recruited two Hong Kong hedge funds — Head and Shoulders Global Investment Fund SPC and Goldenway Capital SPC — to help him buy Amaya.

Following news of Baazov’s bid withdrawal, Amaya stock dropped 5.3 percent to C$18.25 — the biggest fall of December — leaving its market value at C$2.66 billion (US$2 billion). This is the lowest valuation of Amaya since the company bought PokerStars for $4.9 billion in 2014.

Despite the company’s low point, SpringOwl Asset Management, a U.S. activist investor with a significant stake in Amaya, criticized Baazov’s bid for being too low and lacking transparency.

SpringOwl CEO Jason Ader encouraged other Amaya investors to avoid “the undue influence” of Baazov and continue working to make the business stronger.

Baazov owns a 17 percent stake in the company, but couldn’t buy the necessary shares to complete the deal.

This is the second big transaction involving Amaya to fall through recently. They discussed a merger with William Hill two months ago that would’ve seen both companies form one of the biggest forces in online gaming.

However, U.K. activist investor Parvus Asset Management, one of William Hill’s largest investors, was fiercely against the deal.

As for Baazov, he founded Amaya in 2004 and convinced major Wall Street investors to help him purchase PokerStars. But he had to step down from his CEO role earlier this year after insider trading allegations from Quebec’s securities regulator.

He continues to fight the charges and was still working towards the takeover bid until recently abandoning it.