A blockbuster deal went down on Thursday evening that will see a wholly owned subsidiary of the Amaya Gaming Group acquire PokerStars, Full Tilt Poker and all of the Oldford’s/Rational Group’s assets for a staggering $4.9 billion.
The deal has been rumored for several weeks as Amaya Gaming’s stock started to inexplicably rise in late May, with CalvinAyre.com the first to offer up a potential acquisition of PokerStars as the reason behind the company’s stock surge.
Rumors of a pending announcement circulated throughout the week, sending Amaya stock prices even higher, and causing trading to be cancelled on Thursday due to two days of heavy trading.
Late Thursday evening the deal was announced, and the online poker world is now trying to sift through all the details and make sense of it.
Key Transaction Highlights from the Press Release
- The Transaction will result in Amaya becoming the world’s largest publicly-traded online gaming company. The online poker platforms PokerStars and Full Tilt Poker are collectively the world’s most popular and profitable online poker brands with more than 85 million registered players on desktop and mobile devices.
- For calendar year 2013, pro forma combined revenue, EBITDA and adjusted EBITDA1 of Amaya and Oldford Group were $1.3 billion, $474.8 million and $473.8 million, respectively. For 2014, the Corporation is projecting pro forma adjusted EBITDA, assuming the Transaction had been completed as of January 1, 2014, of between $600 and $640 million.
- The Transaction combines complementary businesses with minimal overlap: Isle of Man-headquartered Rational Group’s B2C poker business including PokerStars, Full Tilt Poker, live poker tours and events, and online and TV poker programming; and Montreal-headquartered Amaya’s B2B interactive and physical casino and lottery gaming solutions.
- Under the terms of the Transaction, Oldford Group shareholders led by Mark Scheinberg, founder and Chief Executive Officer, will dispose of their shares to a wholly-owned subsidiary of Amaya. Mr. Scheinberg and other principals of OIdford Group will resign from all positions with Oldford Group and its subsidiaries on completion of the Transaction.
- Rational Group’s executive management team will be retained and online poker services provided by PokerStars and Full Tilt Poker will be unaffected by the Transaction, with players continuing to enjoy uninterrupted access to their gaming experience.
- The boards of directors of both Amaya and Oldford Group unanimously approved the Agreement.
- The Transaction will be financed through a combination of cash on hand, new debt, a private placement of subscription receipts, a private placement of common shares and a private placement of non-voting convertible preferred shares.
- Affiliates of GSO Capital Partners LP (“GSO”), the credit division of The Blackstone Group (BX), have agreed to participate in the debt financing, to subscribe for $600 million in convertible preferred shares, and to purchase $55 million of common shares of the Corporation with each common share priced at C$20 upon closing of the Transaction.
- An investment manager (the “Investment Manager”), on behalf of its clients, has agreed to participate in the debt financing, to subscribe for approximately $270 million in convertible preferred shares, and to purchase approximately $55 million of subscription receipts.
- No change related to this Transaction is contemplated for Amaya’s Board of Directors.
What US online poker players need to know
With the Scheinberg’s et al. out, the deal does pave the way for PokerStars to gain an online gaming license in New Jersey. I expect the DGE to reopen their license application as soon as the deal is finalized.
However, PokerStars/Amaya would still be considered persona non grata in several states that are pursuing online gaming bills that include “Bad Actor” language.
In California for example the proposed bill being pushed by a coalition of tribes disallows companies, trademarks, software, and even player lists that were used in the US after December 31, 2006. The same roadblocks are also in place in Pennsylvania and New York. This could also jeopardize Amaya’s chances in those states.
You can read the full press release at Yahoo Finance
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