SpringOwl Asset Management, a growing investor in Amaya Inc., has sent a letter to Amaya’s CEO and board formally opposing a bid to acquire the company by former CEO David Baazov.
SpringOwl is headed by Jason Ader, who charged in the letter that Baazov’s bid is not credible and that the company should move on from Baazov unless he increases the bid and makes the sources of his funding more apparent. Baazov’s bid is for $4.1 billion.
“If I were making a $4 billion bid and would want the shareholders to take me seriously, I would provide much more transparency to the shareholders,” Ader told Bloomberg News in a phone interview. “Amaya needs to get back to growing the business. It’s competitive out there.”
Ader also said in the letter that the company needs to stop “the undue influence” Baazov has on Amaya and raised concerns about controversy surrounding Baazov’s financing.
Last month, Baazov listed a Dubai-based investor as a source of funding for the bid, but that investor later said its support of the deal had been given without the firm’s consent. In a filing to the U.S. Securities and Exchange Commission, Baazov said two Hong Kong funds—Head and Shoulders Global Investment Fund SPC and Goldenway Capital SPC—would increase their investment to cover the bid. However, Ader said the situation and the little-known companies involved are suspicious.
“If we have a credible bid with transparency, then we should consider it,” Ader said according to Bloomberg. “But the current price seems low and the lack of transparency and the information about the sources of funding raises a lot of questions.”
Ader told the news service that SpringOwl owned less than 1 percent of Amaya as of Sept. 30, but has since more than doubled its ownership stake.
Baazov did not respond directly to the letter.
“Mr. Baazov stands behind his offer and intends to continue engaging constructively with Amaya towards a board supported transaction,” spokesman Riyaz Lalani told Bloomberg.
Amaya acknowledged receiving the letter from SpringOwl and “will continue to engage constructively” with the investor, spokesman Eric Hollreiser told the news service.
“The Board and management welcome input from all of our shareholders and look forward to continuing to actively engage with them,” he said.
Baazov was forced to step down as CEO of Amaya after being named in insider trading charges by Canadian regulators. Ader’s letter called Baazov’s bid “a continued attempt by a discredited former executive to capitalize on the Amaya situation at other shareholders’ expense.”
Ader also said the company could deliver better shareholder value by sticking to its own strategic plan of developing casino and sports betting products. He also said the bid undervalues the company, which owns the lucrative PokerStars brand.
