MONTREAL -- Amaya's chairman and CEO is looking to take the world's largest online poker company private about 18 months after it acquired PokerStars for US$4.9 billion.
David Baazov and a group of investors announced Monday their interest in paying $21 per share in cash, 40 per cent above Friday's closing price.
"The particular form and structure of the transaction have not been determined, and no discussions have commenced between Mr. Baazov and Amaya with respect to any particular transaction," said a news release issued in Baazov's name.
It said there is no guarantee that a transaction will proceed or be concluded. A similar statement issued by the company's board of directors said a committee of independent directors would review any formal offers by Baazov or others.
The announcements prompted a surge in Amaya's stock price, which peaked Monday at $19.75 on the Toronto Stock Exchange -- the most since Dec. 24. In later trading, Amaya (TSX:AYA) stock fell back to close up $3.01 or 20 per cent at $18.
Baazov owns about 18.6 per cent of the 132.78 million outstanding shares of Amaya and has options to purchase 550,000 more shares.
Amaya as a whole would be worth $2.79 billion at the suggested purchase price, including the stock and options that Baazov already owns.
The company's stock hasn't recovered since plunging from above $31 in early November after it lowered its financial expectations for 2015.
Over the last 52 weeks, they have fallen from a peak of $37.52 about a year ago to a low of $13.73 last week.
The company's board has set up a special committee, headed by lead independent director Dave Gadhia, to review any formal proposal brought forward by Baazov and any other alternatives.
Amaya, which owns PokerStars and various other online gaming businesses, didn't provide a reason for Baazov's proposal. Amaya and Baazov declined requests for comment.
Maher Yaghi of Desjardins Capital Markets said the offer is below his fundamental valuation of $28.50 per share.
"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," he wrote in a report.
The analyst also said Amaya's high debt in an environment of increasing interest rates is another factor for shareholders to consider.
Amaya transformed its business in the summer of 2014 when it bought Oldford Group, parent company of the Rational Group, which operates PokerStars and Full Tilt Poker. Its poker brands have 97 million registered players around the world.
Trading activity surrounding the deal came under scrutiny by Quebec's securities regulator in December 2014 but no allegations have been made by Autorite des marches financiers, which declines to comment.
Amaya has said it has discovered no evidence of wrongdoing by its employees.
