Confusion over financing stalls Baazov’s push to buy Amaya
Amaya Inc. founder David Baazov vowed to push ahead with a US $6.7billion takeover bid for the online gaming company after a Dubaibased investor said its purported backing for the deal was given without the firm’s knowledge or consent.
Baazov said Wednesday he had been advised by KBC Aldini Capital Ltd. that the investment firm hasn’t committed any financing for the deal. Baazov said he plans to find replacement funds and still intends to buy the Quebecbased owner of Pokerstars for $24 a share.
He didn’t say where he would get the new financing.
Amaya plunged on Tuesday after the Globe and Mail reported that KBC Aldini said it had no dealings with Baazov and that it wasn’t backing his bid to take the company private.
KBC was one of four investors named in the Nov. 14 offer, apparently providing a combined US$3.65 billion in equity financing.
The others were Hong Kongbased Head and Shoulders Global Investment Fund and Goldenway Capital SPC, along with Ferdyne Advisory Inc., which is registered in the British Virgin Islands.
Neither Goldenway Capital or Ferdyne could be reached for comment.
Kalani Lal, KBC’s chief executive officer, said Wednesday he was surprised when he saw his company’s name in regulatory filings backing the bid.
He said his firm has had no interaction with Baazov and has filed a complaint with the U.S. Securities and Exchange Commission and regulators in Canada.
KBC Aldini is a boutique investment bank that has raised US$2 billion for past deals. he said.
“Somebody has misused our name,” Lal said. “I am totally confused. I’m totally lost.”
Another Baazov backer said the confusion over KBC Aldini has cast uncertainty on the deal.
“The only thing I can confirm with you is that we are working with David Baazov,” said Stanley Choi, chairman of Head and Shoulders Financial Group, prior to Baazov’s disclosure.
Asked if he thought the bid would proceed, he said: “I don’t know. There is a lot of uncertainty right now.”
Baazov’s Toronto-based advisers, Canaccord Genuity Group Inc. and Goodmans LLP, had received signed financial commitment letters purporting to be from each of the financial backers and conducted due diligence on the commitments, according to people familiar with the matter.
Representatives for Canaccord and Goodmans weren’t immediately available for comment.
Eric Hollreiser, a spokesman for Amaya, said Tuesday that, while the company has engaged in discussions with Baazov’s advisers over his proposal, no agreement has been reached and there’s no assurance one will be.