Baazov takes leave from Amaya to focus on defence
The Amaya Gaming Group headquarters are seen on June 13, 2014 in Montreal. (Ryan Remiorz / THE CANADIAN PRESS)
The Canadian Press
Published Tuesday, March 29, 2016 7:47AM EDT
Last Updated Tuesday, March 29, 2016 9:16AM EDT
MONTREAL -- David Baazov is taking an indefinite paid leave of absence as CEO and chairman of Amaya Inc., owner of the PokerStars online gambling business.
Amaya said Baazov is taking the leave voluntarily to focus on his response to allegations against him by Quebec's stock market regulator and prepare an offer to buy the Montreal-based company.
Baazov faces five charges, including influencing or attempting to influence the market price of the securities of Amaya and communicating privileged information. He has denied the accusations and said he is confident he will be found innocent of the charges.
"As always, I continue to be dedicated to doing the right thing for Amaya and all its stakeholders," Baazov said in a statement Tuesday.
"I believe that stepping down in the short term will help to avoid distraction for the company and its management while I vigorously contest all allegations made against me and pursue my bid to acquire the company."
Baazov was charged last week along with two other people and three companies following an investigation by the Autorite des marches financiers into alleged insider trading.
The AMF also announced last Wednesday that it executed search warrants and obtained court orders to stop the activities of 13 people who traded in different securities while in possession of privileged information. The 13 people are alleged to have used their access to information to reap nearly $1.5 million in profit from stock trades.
The company (TSX:AYA) said Baazov's role as CEO will be assumed on an interim basis by Rafi Ashkenaz, who is currently CEO of the Rational Group, Amaya's operating business that includes the PokerStars and Full Tilt brands.
The role of chairman of Amaya's board will be assumed by Divyesh (Dave) Gadhia, who has been a director since 2010 and chairs the committee of independent directors that would evaluate any takeover proposal from Baazov.
In announcing Baazov's leave, Amaya said the special committee headed by Gadhia has instructed its financial adviser, Barclays Capital Canada, to begin contacting other parties who might be interested in a transaction involving Amaya. The committee is also negotiating with certain parties that might gain access to confidential information.
"The special committee has not made a determination as to whether a sale of Amaya is in the best interests of the company at this time. The special committee will consider any offer made by Mr. Baazov and any expressions of interests made by third parties if and when any such offers or expressions of interest are made."
Based on Monday's closing stock price, Amaya had a market value of just under $2 billion -- about where it was in early February when Baazov first indicated publicly that he was interested in buying out other shareholders.
At the time, Amaya said Baazov had informally indicated he would pay $21 per share in cash, which was 40 per cent above the pre-announcement price of $14.99. The stock rose in the following weeks to as high as $21.82 on March 3 but has since given up the gains and closed Monday at $14.81.