The drama grows in Canada. The stage is occupied by Apollo Global Management and Great Canadian Gaming Corp. The play is all about a takeover bid that has been deemed too paltry by investors.
The acquisition plans of private equity behemoth, Apollo, may be stymied if it has in fact undervalued the casino operator at C$39 a share. However, it is a 35 percent premium over its closing price on the day of the evaluation.
At the heart of the matter are Great Canadian’s Ontario properties. Are they indeed worth far more? Investors like the money manager, Burgundy, intend to vote no. The managers feel that the 25 casinos and pari-mutuel establishments spanning from Canada’s Atlantic Coast to British Colombia are not to be had at such a low share price.
It started with the pandemic and the rise and fall of the gaming sector. This has given Apollo an opportunity, perhaps too great a one. The decision should be coming soon in other investors like BloombergSen and CI Financial come on board.
It isn’t looking good as BloomberSen, a Toronto-based hedge fund, controls 14 percent of GCGC equity, and has criticized Apollo’s offer, as “a terrible and ridiculous deal.”
Also likely to vote against are Madison Avenue Partners and Breach Inlet Capital, two US-based investment firms with smaller stakes.
Apollo has intended to grow and has been on the prowl for gaming assets. This is especially true after the company lost out to Caesars Entertainment in an effort to acquire sportsbook operator William Hill.
Analysts and pundits know that Apollo has a deep history in the casino business. In fact, back in 2006, it partnered with Texas Pacific Group to acquire Harrah’s Entertainment, which would eventually become Caesars. It went down for $27.8 billion. Too bad the old Caesars filed for bankruptcy causing Apollo and TPG to liquidate their respective shares.
This was a major event last year and was followed by an offer of $17.3 million from Eldorado Resorts for the gaming company.
Meanwhile, the drama goes on with many spectators in the audience.