Baazov Sells $100 Million of Amaya Stock as Company Seeks Distance from Former CEO
Posted on: March 9, 2017, 04:03h.
Last updated on: March 9, 2017, 08:35h.
David Baazov has sold $100 million-worth of shares in PokerStars parent, Amaya, the company he founded and transformed into one of the biggest online gambling entities in the world before his spectacular fall from grace last year.
The sale represents a reduction of Baazov’s stake in Amaya from 17.2 percent to around 12.1 percent, a 30 percent cut.
The move comes after Amaya announced earlier this week that it had restructured some of its first-lien loans in order to free up some extra cash flow, but one of the provisions of the refinancing had been to push Baazov further out of the picture.
Amaya said that “certain lenders” had demanded that the ability of a “certain current shareholder” to “directly or indirectly acquire control of the company” should be removed. Should Baazov be permitted to regain control of Amaya, then it would result in “an event of default and potential acceleration of the repayment of the debt under the credit agreement for the first lien term loans.”
Since Amaya borrowed billions when it acquired the Rational Group assets that included PokerStars in 2014, that would not be a good thing.
Fall From Grace
In early 2016.Baazov, then still the CEO and chairman of the company, announced his intention to take Amaya private. But while he was preparing his bid he was charged with five counts of insider trading by the Quebec securities regulator, AMF.
The case, which is due to go to court in November, has been described by the regulator as the biggest securities fraud case in Canadian history.
Baazov stands accused of being at the tip of an “information-sharing” pyramid that allowed a close circle of family, friends and business acquaintances to profit from illegal stock trades in the lead up to several industry takeovers, including Amaya’s of PokerStars.
If found guilty, he could face up to five years in prison.
Baazov Frozen Out
He resigned as CEO in August, and it was assumed the charges hanging over him had buried the bid. But Baazov was back in November, with an unexpected proposition that valued the Amaya at around $2.56 billion.
The deal never came to fruition, and now those “certain lenders” appear to be determined to ensure it never does.
Baazov pulled off one of the unlikeliest coups in online gaming history when he sweet-talked Blackstone, the world’s biggest private equity firm, into helping finance a $4.9 billion takeover of PokerStars.
But it sounds like Wall Street money isn’t too impressed with him these days.
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