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PokerStars Owner Amaya $AYA in $6B Merger Talks With William Hill $WMH

PokerStars Owner Amaya $AYA in $6B Merger Talks With William Hill $WMH

Amaya Inc. (NASDAQ: AYA; TSX: AYA) and London-based William Hill plc (LSE: WMH), said “they are in discussions regarding a potential all share merger of equals,” that would would create “a clear international leader across online sports betting, poker and casino.” Amaya, the world’s biggest publicly listed online gambling company and owner of PokerStars, the world’s largest real-money online poker network, had retained Barclays Bank as its financial adviser to explore a sale, as reported by ExitHub earlier this year. Founded in 1934, William Hill is one of the world’s leading betting and gaming companies, employing more than 16,000 people in nine countries, including the UK, Gibraltar, Israel, Bulgaria, Italy, Spain, the US, Australia and the Philippines. In addition to its online sportsbook operations, the company offers online casino games, ‘skill games’, online bingo and online poker. Citigroup Global Markets and Macquarie Capital are acting as financial advisers to William Hill, which in recent months has been evaluating options to accelerate its strategy of increasing diversification by growing its digital and international businesses. In August, the British bookmaker rejected a takeover bid from its rivals 888 Holdings and Rank Group. GSO Capital Partners, the credit arm of private equity firm Blackstone Group (NYSE: BX), holds a stake of 19.99% in Amaya. GSO was a major financial backer of Amaya’s $4.9-billion buyout of Oldford Group Ltd and its Isle of Man-headquartered Rational Group Ltd, the owner and operator of the PokerStars and Full Tilt Poker brands, in August 2014. Several parties, including sports betting and gaming company GVC Holdings, as well as David Baazov, considered the “king of online gambling” who resigned under pressure as chairman and CEO of Amaya, were interested in acquiring the company. In late March, Amaya said that its founder Baazov was taking a voluntary leave “to focus on preparing an offer to acquire Amaya and to avoid a distraction for the company while he responds to certain allegations made against him by the Autorité des marchés financiers (AMF), the securities regulatory authority in Quebec.” In August, he permanently resigned all positions at Amaya. “Amaya remains focused,” said the company’s recently appointed CEO Rafi Ashkenazi. “We attracted new customers to PokerStars, continued to introduce changes to improve the overall poker experience, expanded our online casino offering and continued to invest in our emerging online sportsbook.” Amaya is a leading provider of technology-based products and services in the global gaming and interactive entertainment industries. Amaya owns gaming and related consumer businesses and brands including PokerStars, Full Tilt, BetStars, StarsDraft, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. Its brands have more than 100 million cumulative registered customers globally and collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in popular casinos in major cities around the world, and poker programming created for television and online audiences. Amaya also offers non-poker gaming products, including casino, sportsbook and daily fantasy sports. Amaya and its group companies have various gaming and gaming-related licenses or approvals throughout the world, including from the United Kingdom, Italy, France, Spain, Estonia, Belgium, Denmark, Bulgaria, Greece, Ireland, Romania, the Isle of Man, Malta, the State of Schleswig-Holstein in Germany, the Provinces of Quebec and Ontario in Canada, and the State of New Jersey in the United States. The company was founded in 2004 and it has nearly 2,000 employees. ONLINE GAMBLING AND GAMING M&A ACTIVITY A few  days ago, Philippine billionaire Roberto “Bobby” Ongpin, the former chairman and controlling shareholder of PhilWeb Corp. (PSE: WEB), a leading gaming technology provider in the Asia Pacific region, sold his 53.76 percent stake in the company to Gregorio Maria “Greggy” Araneta III, the son-in-law of the late dictator Ferdinand E. Marcos. Ongpin himself was a former Minister of Trade and Industry during the Marcos administration in the 1970s. The move came after the new Philippine President Rodrigo Duterte, who took office on June 30 after running on a platform to clean up the country, specifically named Ongpin in a speech in early August, as one of the “oligarchs that are embedded in the government” who he literally said he plans to “destroy.” The recent wave of M&A is likely to continue as operators look to become bigger and more diversified to offset rising costs and compete more effectively. In late May, private equity firm CVC Capital Partners acquired Italian gaming and payments operator Sisal Group SpA from private equity firms Apax Partners, Permira and Clessidra for €1 billion. In April, Las Vegas-based NYX Gaming Group Limited (TSX-V: NYX) agreed to acquire OpenBet (OB Topco Ltd), the #1 regulated digital gaming supplier globally, from private equity firm Vitruvian Partners LLP, its co-investors and management, for £270 million. As part of the deal, William Hill and SkyBet, owned by CVC Capital and Sky plc, were said to have invested £80 million and £20 million, respectively. Earlier this year, CVC Capital acquired a majority stake in German gaming company Tipico for close to €1.5 billion ($1.68 billion). In December 2014, CVC acquired Sky Betting and Gaming for £800 million, consisting of five core brands Sky Bet (sports betting), Sky Vegas (online in-browser casino), Sky Casino (premium online casino, live table games), Sky Poker (online poker) and Sky Bingo (online bingo). CVC also made previous investments in William Hill (2002 IPO exit, at 314% ROI) and the IG Group, a digital trading and betting platform. “Sports betting contributed substantially to Sisal’s revenues (in 2015), with the Italian market growing by 24.7 percent compared with 2014,” said gaming industry analyst Joss Wood. “The March (2016) revenue figures issued by regulator AAMS show Sisal ranked fourth for online sports betting with monthly revenue of €23.4 million ($26.8 million).” “Gaming companies with a larger online presence are likely to see higher revenue and EBITDA growth over the next 12-18 months than those more focused on traditional land-based business, as the gradual shift online continues, mobile phone and tablet penetration rises, and fast-growing demand for online games increases,” said Moody’s vice president and senior analyst, Donatella Maso. UK-based William Hill Plc has the biggest online exposure by revenue, while pure online operator Sky Bet (Sky Betting & Gaming) has the most significant presence by percentage of total revenue. Conversely, Ladbrokes Plc is one of the largest gaming companies in the UK but its digital division still lags its peers and it reported negative EBIT in 2015, according to Moody’s. While SNAI SpA’s revenues have surpassed Sisal’s following its acquisition of Cogemat SpA and it has gained leadership positions in retail sport and horse betting, “Sisal will remain more profitable mainly due to its more favorable product mix,” Maso said. SNAI is Italy’s second-largest gaming company after International Game Technology. SNAI is also the leader in sports and horse betting and the third-largest concessionaire of amusement with prize machines and the second-largest of video lottery terminals by turnover. The online sector’s fundamentals are expected to remain positive for at least the next two to three years, which will support high single-digit growth rates despite regulatory and tax pressures. Potential legalization of online gambling or further liberalization of the rules that already govern it in some European markets and US states offer growth opportunities for large online gaming operators, which could offset uncertainty in regulatory regimes. Europe, in particular, continues to see the creation of an increasing number of new regimes that permit licensed and regulated betting, notably through interactive platforms, and which is gradually removing the once dominant monopolistic approach favoring the lottery sector, according to the European Gaming & Betting Association (EGBA). The continuing growth of professional sport and associated betting markets on a global scale, as a direct result of consumer demand driven by technological advances, has provided both business sectors with clear fiscal benefits and further strengthened their symbiotic relationship, says the EGBA. This has manifested itself in a range of mutually beneficial commercial ventures through direct sponsorship of sporting events, sportspeople and clubs, along with numerous indirect benefits to both products from media advertising deals around sport (where legislative frameworks permit). In recent years, online gaming markets — including sports betting, poker, casino, bingo, lottery — have grown rapidly to €36.9 billion in 2014 from approximately €6.6 billion in 2003, and are expected to grow to approximately €42.8 billion by the end of 2018, says Moody’s. The online gambling sector offers growth opportunities for European gaming companies in 2016-17 versus traditional brick-and-mortar operations, despite likely pressure from increasing taxes and regulation, says Moody’s. Last year, the UK became the biggest hub for gambling M&A, as reported by ExitHub. The betting sector has seen a string of deals, as companies respond to higher tax bills in Britain, tighter regulation, growing competition, and rising use of mobiles and tablets. In the summer of 2015, bookmakers Ladbrokes and Coral agreed to a £2 billion merger, which was quickly followed by a £5 billion merger between Paddy Power and betting exchange Betfair, creating a gambling behemoth. It was followed a month later by the conclusion of GVC’s drawn-out battle against Israeli online gambling company 888 to buy Foxy Bingo-owner Bwin.Party for more than £1 billion. Photo: David Baazov, founder and former chairman and CEO of Amaya.]]>

PokerStars Owner Amaya $AYA in $6B Merger Talks With William Hill $WMH

PokerStars Owner Amaya $AYA Hires Barclays to Explore Strategic Alternatives

Amaya Inc. (NASDAQ: AYA; TSX: AYA), the owner of PokerStars, the world’s largest real-money online poker network, said its review of strategic alternatives is active and ongoing, amid rising revenues, EBITDA and net income. Barclays Capital Canada Inc., the company’s financial advisor, has contacted a range of strategic and financial parties who might be interested in a transaction involving Amaya, the company said. Amaya is the world’s biggest publicly listed online gambling company. Several parties, including David Baazov, considered the “king of online gambling” who is on a leave of absence as chairman and CEO of Amaya, have received management presentations and are conducting due diligence. In late March the company said that “Baazov is taking this leave voluntarily to focus on preparing an offer to acquire Amaya and to avoid a distraction for the company while he responds to certain allegations made against him by the Autorité des marchés financiers (AMF), the securities regulatory authority in Quebec.” GSO Capital Partners, the credit arm of private equity firm Blackstone Group (NYSE: BX), holds a stake of 19.99% in Amaya, resulting from a cashless exercise of warrants a month ago. GSO was a major financial backer of Amaya’s $4.9-billion buyout of Oldford Group Ltd and its Isle of Man-headquartered Rational Group Ltd, the owner and operator of the PokerStars and Full Tilt Poker brands, in August 2014. “Amaya remains focused,” said Rafi Ashkenazi, Amaya’s interim CEO. “During the first quarter, we continued to execute on our growth plans despite unexpected challenges, including management changes and the ongoing strategic alternatives process.” The company’s total revenues for the first quarter ended March 31, 2016 increased 6.0% year-over-year to $288.7m, EBITDA rose 8.7% to $123.4m, and adjusted net income rose 26% to $85m. “We attracted new customers to PokerStars, continued to introduce changes to improve the overall poker experience, expanded our online casino offering and continued to invest in our emerging online sportsbook,” he added. Meanwhile, Baazov and Amaya’s CFO Daniel Sebag, have advised the Board that they will not be standing for re-election as directors at the company’s upcoming annual shareholders meeting. Amaya is a leading provider of technology-based products and services in the global gaming and interactive entertainment industries. Amaya owns gaming and related consumer businesses and brands including PokerStars, Full Tilt, BetStars, StarsDraft, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. These brands have more than 100 million cumulative registered customers globally and collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in popular casinos in major cities around the world, and poker programming created for television and online audiences. Amaya, through certain of these brands, also offers non-poker gaming products, including casino, sportsbook and daily fantasy sports. Amaya and its group companies have various gaming and gaming-related licenses or approvals throughout the world, including from the United Kingdom, Italy, France, Spain, Estonia, Belgium, Denmark, Bulgaria, Greece, Ireland, Romania, the Isle of Man, Malta, the State of Schleswig-Holstein in Germany, the Provinces of Quebec and Ontario in Canada, and the State of New Jersey in the United States. The company was founded in 2004, it has nearly 2,000 employees, and a market capitalization of CAD 2.62 billion. Photo: David Baazov, former Chairman and CEO of Amaya.]]>