Great Canadian Gaming Corporation recently made an important announcement regarding its future, but there has been strong opposition soon after the news became public. Minority shareholders recently voiced their position when it comes to the CA$2.1-billion acquisition of the casino operator by a U.S. private equity firm. Apollo Global Management Inc. is ready to purchase the gaming leader.
This week was a riveting one for Canada’s gaming field, as it witnessed one of its major players enter a definitive agreement for its purchase. The casino operator is going to be acquired by Apollo Global Management, Inc. striving to improve its gambling and hospitality potential. The acquisition will amount to some CA$2.1 billion in Great Canadian Gaming common stock.
Minority Shareholders
Soon after the decision was announced publicly, all details around it were thoroughly reviewed. The casino operator might be on the verge of a whole new era of its operation if this acquisition receives the support of its shareholders. It will mean that Canada’s largest casino operator is owned by a U.S.-based private equity firm further supporting its growth.
Some of the minority shareholders of Great Canadian Gaming quickly expressed their position regarding the announced definitive agreement. Bloombergsen Investment Partners was among the shareholders opposing this decision. The Toronto-based investment firm owns about 14 percent of the casino leader’s equity. It recently pointed out that the proposed payment coming from Apollo Global Management would not be lucrative down the road.
It could be recalled that the definitive agreement comes with the payment of CA$39 per every Great Canadian Gaming share. The minority shareholder pointed out that this amount fails to reach the true long-term value of the stock, which will end up harming the shareholders down the road. The Canadian investment firm would most likely vote against the acquisition of the casino operator.
Backlash after Announcement
Other minority shareholders have also expressed their position on the subject, as well as their plan for action. Madison Avenue Partners and Breach Inlet Capital also own a percentage of Great Canadian Gaming’s equity and they pointed out that they will also vote against the acquisition once they get the chance to do so. December 2020 will hold a special meeting of shareholders that will see a vote on the subject.
An informational circular is going to include more information on the transaction and all Great Canadian Gaming shareholders will get the chance to look through it. Regulators will also get the chance to cast their vote on the CA$2.1-billion move. Minor investors have also made a point that the casino operator should have looked for alternative acquisition offers made by other firms so that shareholders can have options to choose from.
Apollo Global Management’s offer per share amounts to a 35-percent surge, but minority shareholders expected more. Great Canadian Gaming’s Chief Executive Officer Rod Baker said that the independent directors had not considered alternative offers by potential investors ahead of this definitive agreement. He strongly supports it as a step in the right direction for the casino leader.
