Toronto-listed Great Canadian Gaming Corporation announced Tuesday it entered into a definitive agreement to be acquired by Apollo Global Management. Under the terms of the deal, all outstanding common stock of the company will be acquired by the investment manager company at a price of C$39.00 per share.
Fair Share Price Premium on Offer
Upon completion of the transaction valued at C$3.3 billion, Great Canadian will remain a Canadian entity led by Canadian managers and Canadian board members. The buyer is also anticipating certain institutions in the country to become equity co-owners in the gaming entity by participating in the investment process alongside the investment management company, which has a track record of successfully owning businesses in highly regulated industries.
The proposed price by the investment manager which failed in its attempt to acquire sports betting company William Hill, represents a 35% premium on the market closing price the day before the announcement, as well as a 59% premium to the 30-day volume weighted average price (VWAP) as of November 9, 2020.
In the gaming sector, Apollo has extensive experience through the operations of Aliante, Gala Coral, Gamenet and PlayAGS, formerly known as American Gaming Systems. Besides successfully enhancing and growing gaming operations in the UK, US and Italy, Apollo has a reputation of a responsible investor in industries ranging from gaming to healthcare, chemicals and aerospace.
“…we believe Apollo’s extensive experience in the gaming sector will provide additional strategic benefits to help expand our gaming and hospitality offerings and to secure our position as a long-term market leader.”Rod Baker, CEO, Great Canadian Gaming Corporation
Appproval Recommendation to Shareholders
The board of directors at Great Canadian unanimously approved the agreement with Apollo, as the proposed price offers a substantial premium to shareholders and is in the best interest of the company. Fairness opinions from Scotiabank and CIBC World Markets Inc also confirmed the deal is fair to shareholders from a financial point of view, and Great Canadian board recommended to company’s shareholders to approve the transaction.
“With an industry-leading portfolio of assets and established presence in the best geographic markets across Canada, we are excited to help bring an enhanced experience to more guests across Canada.”Alex van Hoek, Partner, Apollo Global Management
The company which was found 1982 and currently operates 25 gaming and hospitality facilities in Ontario, British Columbia, Nova Scotia and New Brunswick, has been hit hard by the coronavirus outbreak which caused property shutdowns in March.
“We also recognize the challenges of the current circumstances and are committed to working with the management team, regulators and health authorities to allow the Company to reopen its properties as soon as it’s safe to do so.”Alex van Hoek, Partner, Apollo Global Management
The completion of the business transaction will be subject to closing conditions, including approvals from regional and national regulators, shareholders, and the Supreme Court of British Columbia.