Alleged Baazov Private Equity Backer Denies Any Knowledge of Amaya or Buyout Deal

Posted on: November 22, 2016, 04:22h. 

Last updated on: November 23, 2016, 03:32h.

KBC denies knowledge of Baazov Amaya bid
David Baazov’s stated backer in his bid to acquire Amaya claims to have no knowledge of the deal. If true, it could land the former chairman and CEO of Amaya in more hot water (Image: Financial Post)

November 23, 2016 UPDATE: According to Canada’s CBC News, Baazov today admitted that the Dubai firm he had claimed was part of his private financing equity deal was, in fact, never informed that they were included in his buyout bid commitment letter to Amaya.

Nonetheless, the former CEO, who is awaiting trial by Quebec’s financial regulatory agency AMF on insider trading charges, says he stands by his original bid of $6.7 billion, which includes assuming Amaya’s existing debt.

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David Baazov’s bid to acquire Amaya and take the company private took an unexpected twist on Tuesday when one of the private equity firms said to be financing the deal claimed it had “no involvement whatsoever” in the proposal.

KBC Aldini Capital chief executive Kalani Lal told Canada’s Globe and Mail newspaper he “didn’t know what Amaya was” and denied his company had held any discussions with Baazov.

KBC was one of four firms that former Amaya chairman and CEO Baazov claimed, in a filing to the US Securities and Exchange Commission (SEC) on November 14, had committed to providing $3.65 billion in financing the propose deal. Not so, said Aldani, who added that his company had filed a complaint to the SEC.

Securities Fraud Charges

Baazov first announced his intention to take over Amaya in February this year, but just weeks later he was charged by Quebec financial markets regulator AMF with five counts of securities fraud.

These related to the alleged leaking of privileged information in order to enrich a close circle of friends and family through illegal stock trades, as well as attempting to influence the price of Amaya’s securities.   

The group is alleged to have made around $1.5 million in profit from trading stocks prior to at least six separate takeover deals, going back to 2010.

It began, allegedly, with Amaya’s acquisition that year of Cryptologic, and is said to have continued through to the acquisition of PokerStars and beyond, to Baazov’s initial announcement of his own Amaya takeover bid.

Baazov, while protesting his innocence, was forced to resign from the Amaya’s board, although he remains its largest shareholder. Until his formal bid was filed last week, it was thought that the charges had buried his takeover attempt.

SEC Complaint

Baazov said he believed the transaction “should be particularly compelling to Amaya’s shareholders,” although perhaps now, less so.

He is still expected to go to trial on the AMF charges and could face up to five years imprisonment if found guilty, although he has submitted a written plea of not guilty for each of the five charges he faces.

But it’s very possible he could now be facing an SEC investigation too.

“Prior to entering into any agreement with Mr. Baazov with respect to a transaction, Amaya would conduct appropriate due diligence regarding Mr. Baazov’s financing sources,” said Eric Hollreiser, Amaya’s VP of Corporate Communications said in an e-mail to Bloomberg today.

Amaya’s stock tumbled 7 percent in the immediate aftermath of the Globe and Mail story.