Canadian gambling company, Amaya, a well-known global brand in the online poker community, has decided to offload all of its shares in Innova Gaming Group to Pollard Banknote Limited. This comes after a particularly turbulent year for Amaya after its CEO was accused of insider trading on the Toronto Stock Exchange (TSX), during the $4.9 billion takeovers of PokerStar by Amaya.
Innova Gaming Group is a former subsidiary business of Amaya and develops the core programming and software of its games. Amaya till now held 8,180,000 (8 million) shares of Innova Gaming Group, which translates to around 40.45% of the company’s net equity value. The purchase is being made by Pollard Banknote Limited, a company specializing in supplying instant lottery tickets to national and international clients. Pollard Banknote Limited, headquartered in Winnipeg, Canada, was set-up in 1907, is one of the oldest companies involved in printing lottery tickets.
The details of the deal were first transmitted through Reuters news agency, according to which the Pollard group agreed to pay C$2.10 per share for an all-cash deal. The entire deal is reported to be worth C$42 million. On March 10, Amaya formally announced that it was entering into a support agreement with Pollard Banknote Limited, over Innova Gaming’s shareholding.
The Support Agreement has detailed a Proposed Transaction and forwarded it to the Pollard Group. The agreement entails the Pollard Group to pay $2.10 upfront by May 2016 for a 40.45% stake non-diluted basis. Amaya has given its full vocal support to the agreement and is confident that the deal will go through. Amaya has also agreed not to indulge in promoters trading till May when the deal will be signed. This is subject to market conditions and many other factors. The Pollard Group remains optimistic of the offer and the investors have cheered the decision with about 22% rise in its share price due to the decision. Amaya too received a boost of 7% rise after the announcement. Innova Gaming Group’s reaction to the issue hasn’t been yet solidified and talks are going in to bring the company on board.
Amaya, which is currently world’s largest online gambling company, has seen major restructure of all its financial holdings after its CEO David Baazov sold off close to $100 worth of shares when the company acquired PokerStars for a $4.9 billion deal. A Quebec court has earlier suspected insider trading, accusing Mr. Baazov of diluting his shareholdings through backchannels, mostly through his brother. He has pleaded not guilty and is set to face trial in November this year.
Just as the accusations surfaced, Amaya removed the CEO immediately. The press release from the board of directors read out the reason for David Baazov’s removal as “remove the ability of a certain current shareholder to directly or indirectly acquire control of Amaya.” This is the same man Forbes magazine once called “king of online gambling”, post the PokerStars payout.