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In $2.5 Billion Deal, Apollo to Buy Great Canadian Gaming

Great Canadian Gaming Corp. has agreed to be acquired by Apollo Global Management Inc. The deal is said to be over $2.5 billion (C$3.3 billion.

This is big news for a casino industry that’s been hard hit by the burgeoning pandemic.

Here are the parameters: Apollo will pay C$39 a share for the Toronto-listed casino operator. That represents a 35% premium over the stock’s closing price at C$28.91.

Great Canadian’s board has unanimously approved the deal. According to Rod Baker, CEO,

“We believe Apollo’s extensive experience in the gaming sector will
provide strategic benefits to help expand our gaming and hospitality
offerings and secure our position as a long-term market leader.”

As for background, Great Canadian was founded in 1982, It now operates 25 gaming, entertainment and hospitality facilities in Ontario, British Columbia, New Brunswick, and Nova Scotia.

The company had suspended operations at all its properties in March to stem the reach of Covid-19. It is known that the pandemic has devastated the casino industry, along with other businesses where people gather in large numbers.

Among the affected are movie theaters, concerts, and restaurants. Sheldon Adelson’s Las Vegas Sands Corp. is exploring the sale of its casinos in Las Vegas, marking his exit from the gambling industry in the U.S.

The industry is facing challenges. Per Alex van Hoek, a partner in the investment firm, Apollo is committed to working with the management team, regulators, and health authorities to allow the company to reopen its properties as soon as it becomes safe.

Apollo said “certain Canadian institutions” might co-invest in the deal, but they have not been named. Certain Canadian funds — including the largest, Canada Pension Plan Investment Board — are limited partners in Apollo-managed funds.

The firm has long had investments in the gambling sector. Of note, Apollo teamed up with TPG for a 2008 leveraged buyout of Harrah’s Entertainment Inc. In 2020, it took Italian sports betting operator, Gamenet Group SpA, private.

Meanwhile, it was edged out by Caesars in a takeover battle for British gambling group William Hill Plc. In September.

Apollo also agreed to invest 500 million euros ($591 million) in Sazka Group AS, in support of the European lottery company’s expansion plans across the region and North America.

In a different vein, Great Canadian has been involved in British Columbia money laundering in casinos due to its River Rock Casino, south of Vancouver. It will be facing stringent new rules.

Source: https://www.bloombergquint.com/business/apollo-to-buy-great-canadian-gaming-in-2-5-billion-deal