Apollo Global Management announced it will acquire Toronto-based Great Canadian Gaming Corporation for $3.3 billion. Great Canadian Gaming’s board of directors voted unanimously to approve the deal. However, insufficient shareholder support may call it off, according to a CTFN report.
Apollo said it will pay $39 a share but Great Canadian Gaming shareholder Sanjay Sen of Bloomberg said anything less than $70 per share would be unacceptable, according to GGB News columnist Frank Fantini. Sen said one-third of shareholders probably would reject the offer, and accepting it without running a sale process would be unconstitutional. Great Canadian Gaming shareholders will vote on December 23.
Assuming the transaction will move forward, Great Canadian Gaming Chief Executive Officer Rod Baker said, “We believe Apollo’s extensive experience in the gaming sector will provide additional strategic benefits to help expand our gaming and hospitality offerings and to secure our position as a long-term market leader.”
But shareholders say that the offer is undervaluing the company’s winning bid to develop an integrated resort in Toronto.
“Last year, when Great Canadian and its two partner investment firms were granted the Toronto Metro casino monopoly, it struck me as a once-in-a-lifetime opportunity for a mid-size company,” wrote Fantini in the November 16 edition of GGB News. “After all, MGM Resorts and Las Vegas Sands earlier had indicated they would be glad to build a multi-billion resort in Toronto if given the right, and that was even without being given control of outlying casinos for a reginal monopoly.”
Great Canadian Gaming, founded in 1982, shuttered its 25 gaming, entertainment and hospitality facilities in Ontario, British Columbia, New Brunswick and Nova Scotia in March due to COVID-19. Apollo Partner Alex van Hoek stated the firm is “committed to working with the management team, regulators and health authorities to allow the company to reopen its properties as soon as it’s safe to do so,” Alex van Hoek, a partner at the investment firm, said in the same statement.
Besides the pandemic, Great Canadian Gaming felt was impacted last year by British Columbia’s new rules implemented to reduce money laundering in casinos. The BC government released a report in 2017 indicating suspicious cash transactions had occurred at Great Canadian Gaming’s River Rock Casino Resort near Vancouver.
Apollo has made several investments in the gambling sector in the recent past. It partnered with TPG in 2008 on a leveraged buyout of Harrah’s Entertainment Inc. This year, it took Italian sports betting operator Gamenet Group SpA private. And in September, Caesars beat Apollo in a takeover battle for William Hill Plc.
In addition, Apollo announced it will invest $591 million in the European lottery company Sazka Group AS to support its regional and North American expansion plans.
