Desjardins Capital Markets’ VP, Maher Yaghi, said he had “never seen anything like this.”
On November 14, David Baazov filed papers with the US Securities and Exchange Commission (SEC) which revealed financing to buy Amaya Gaming shares at $24 in Canadian dollars.
The news sent Amaya Gaming stock soaring, though events this week caused a similar decline back in the price of Amaya shares. One hedge fund operator said, with the subsequent questions about the financing, he would go nowhere near Amaya stock.
In the SEC filing, Baazov said four different investors were backing his attempt to buy the company he formerly owned. His plan was to take Amaya private, with the backing of several backers.
But news this week throws into question whether the financing is available, or whether David Baazov’s information can be believed at all.
Dubai Holding Company Disputes Baazov’s Claim
Dubai-based KBC Aldini Capital Ltd, which was one of the four companies said to be backing Baazov’s $3 billion acquisition, denied this week that it had anything to do with backing Baazov. KBC Aldini Capital filed its own SEC paperwork to formally deny its connection to Baazov.
Now, the Montreal-based former gaming executive has backed off his claims that KBC Aldini is an investor. Instead, David Baazov and an associate claim they were approached by men who claimed to represent the Dubai-based investment company. The investment hoax, whomever is to blame for it, throws into doubt the entire plan to reaquire Amaya Gaming.
David Baazov and Amaya Gaming
David Baazov was the founder of Amaya Gaming. Baazov used aggressive acquisitions to build Amaya into one of the top online gaming companies in the world. The pinnacle of Amaya’s rise was in the summer of 2014, when the company bought the parent company of PokerStars for $4.9 billion.
That acquisition made Amaya the controller of 70% of the world’s online poker revenues. Baazov worked with New Jersey’s Division of Gaming Enforcement and Morris Bailey’s Resorts Casino to gain licensing, then launch a New Jersey online poker site. Instantly, the PokerStars/Resorts Casino gaming portal was the number one poker site in New Jersey’s legal gaming industry.
AMF’s Charges of Insider Trading
Even by that time, David Baazov and Amaya Gaming were dealing with legal troubles. The Autorite des marches financiers (AMF) out of Quebec investigated Amaya Gaming for insider trading stemming from the PokerStars acquisition.
Eventually, the AMF charged 13 people associated with Amaya Gaming with insider trading, including deals that took place of a 6-year period beginning in 2009. David Baazov, who was charged with 23 crimes, was one of those people. All thirteen people were barred from trading on the Toronto Stock Exchange.
Baazov Left Amaya Gaming
The charges by the Canadian regulator forced David Baazov to take a leave of absence from Amaya Gaming in the spring of 2016. In August 2016, it was announced that David Baazov was leaving Amaya permanently. That seemed to be the end of his association with the company he founded.
Four months later, Amaya’s founder appeared to be on the verge of a $3.5 billion buyout of the company. Baazov’s SEC filing suggested he had “binding equity commitment letters” worth $3.45 billion from two Hong Kong-based investment funds, Goldenway Capital and Shoulders Global Investment Fund.
Ferdyne Advisory’s Involvement
British Virgin Island-registered Ferdyne Advisory, which was the fourth investor, was not mentioned in the SEC filing. That throws into doubt whether Ferdyne Advisory was ever involved at all.
The confusion does not seem to concern Stanley Choi, the CEO of Head and Shoulders Investment. Mr. Choi told Bloomberg News that he was “not at all” concerned by the discrepency, but admitted there was “a lot of uncertainty right now” about the bid’s prospects.
Stanley Choi’s Backing
Stanley Choi is both a poker player and an investor. Choi’s biggest poker feat was winning the 2012 Macau High Stakes Challenge, which netted him $6.5 million in winnings. He also is an investor in Mediarex Sports and Entertainment, which owns the Global Poker League.
Investment in Amaya Gaming is a matter of a much higher order. Alex Dreyfus, also of the Global Poker League, claimed to have put Baazov in contact with Stanley Choi and the other Hong Kong investors.
Dreyfus said, “The have worked since almost nine months on that bid.”
Alex Dreyfus’s Role
Mr. Dreyfus suggested that the two Hong Kong companies have put a lot of time and study into the potential investment, and that Stanley Choi in particular is a “a real believer in the potential of the poker industry.”
The news this week is not the end of David Baazov’s story alongside Amaya Gaming. The recent past shows that Baazov is a formible presence, even if he never regains control of his company. Meanwhile, the charges by the AMF are still pending.
