Amaya Posts Q2 Growth, Baazov Resigns

Posted on: August 15, 2016, 05:00h. 

Last updated on: October 12, 2016, 08:39h.

Baazov Resigns from Amaya
Hot Under the Collar: David Baazov has resigned from Amaya in the face of insider trading charges. (Image: affaires.lapresse.ca)

David Baazov used the occasion of Amaya’s Q2 financial results announcement on Friday to offer his resignation from the company he co-founded in 2004.

The besieged now-former-CEO will be replaced by Rafi Ashkenazi, who has acted as CEO during Baazov’s forced sabbatical. Baazov took leave of his duties in March, having been charged with insider trading by AMF, the Quebec financial regulator. In May, he stepped down from his position as company chairman, a role that will now be permanently filled by Divyesh Gadhia.

“I am proud of my contributions in building Amaya into the successful company it is today, and continue to be supportive of its strategy and management,” said Baazov, the man who sealed one of the most unlikely deals in the history of the gambling industry.

In 2014, when Amaya was a re relatively low key Montreal-based online gaming software provider based, Baazov engineered a $4.9 billion leveraged acquisition of the Oldford Group, and its subsidiary the Rational Group, which owns PokerStars and Full Tilt. The deal transformed Amaya into one of the biggest online gambling companies in the world.  

Bye-bye Baazov

“Amaya thanks Mr. Baazov for his contributions to Amaya since its inception and through its rapid growth, and looks forward to Mr. Ashkenazi’s continued success in leading the execution of Amaya’s strategy,” read a distinctly dispassionate statement from the Amaya board Friday.

There was little word of what had become of Baazov’s bid to take the company private, which he was preparing around the time that the charges hit.  

“The Special Committee of the Board continues its review of strategic alternatives with the goal of determining the best outcome for Amaya and its shareholders,” came the official line. “As previously disclosed, Amaya entered into discussions with a number of parties, and discussions with some of these parties have progressed.”

The Special Committee was also continuing to cooperate with the AMF investigation, according to the official statement. Baazov’s charges include “aiding with trades while in possession of privileged information,” influencing or attempting to influence the market price of securities of Amaya, and communicating privileged information.

10 Percent Q2 Growth

New CEO Ashkenazi reported that Amaya’s Q2 revenues had grown 10 percent over the same period last year, to CAD$286 million, while net earnings had increased 163 percent to CAD$78 million.

Poker remained flat, year-over-year, but Amaya said it was pleased with those results because the purchasing power of its customers had continued to be impeded by the decline of local currencies against the dollar.

“I’m very pleased with the momentum in our core poker business where despite some continued headwinds … we have begun reversing certain negative trends we have faced over the past several quarters,” said Ashkenazi.