Amid controversy over Apollo Global Management’s bid for Great Canadian Gaming, a new offer is on the table. Toronto-listed Great Canadian has been operating gaming, entertainment and hospitality facilities in four Canadian provinces since 1982.
Shareholders have denounced the private equity firm’s offer of C$39/share as too low given the 26 properties involved such as River Rock Casino. They claim that the offer undervalues the company and takes advantage of the drop in the share price due to the pandemic.
They must approve the deal or it dies. Shareholders like BloombergSen Inc. and Burgundy Asset Management Ltd. have clout, so Apollo may be forced to increase to its $2.5 billion takeover bid.
Apollo is wary in light of this year’s revenue declines. After all, Great Canadian has been shutting one casino after another. A total of nineteen are now closed.
Meanwhile, the shares for Great Canadian are rising. Recently, they climbed 1.4% to C$36.88. Negotiations might result in an offer as high of C$41 per share, per documents filed with securities regulators. But at one time, this price had been up to C$45.80.
The stock is on a roller coaster as investors wait to see if the deal will be done. Apollo isn’t willing to go as far as the desired C$70. They fear permanent damage to the company. The firm would rather walk away from the deal.
Apollo’s previous offer has been approved by Great Canadian’s board, avowing it delivers “significant and immediate value” to shareholders despite the negative effects of the pandemic. So what will happen next?