Amaya Confirms Quebec AMF Probe Related to PokerStars Acquisition

Pointe Claire-based Amaya Gaming Corporation has confirmed that Quebec’s Autorité des Marchés Financiers (AMF) is currently conducting investigations into trading transactions related to the iGaming company’s celebrated acquisition of the Oldford Group, holding company to Rational Group and its PokerStars online poker business.

Amaya Gaming made the confirmation through a statement released last Thursday night, after several AMF investigating officials arrived at Amaya’s Point-Claire headquarters last Wednesday, to conduct a search that is part of a wider investigation involving trading activities related to the Amaya-Oldford Group acquisition deal.

Amaya maintains that as far as they are concerned, the ongoing AMF investigation is not premised on any acts of wrongdoings to which the company is involved, and has not affected business operations or the status quo of employees. Nonetheless, the company is monitoring the probe and is extending its cooperation with the AMF investigators.

AMF spokesperson Sylvain Théberge could not provide further details, stating that the Amaya search is only part of a wider investigation. Prior to the Amaya swoop down, the AMF had earlier obtained other pertinent documents from the offices of two other Canadian companies involved in the Amaya-Oldford acquisition transaction, namely Canacord Genuity Corporation and the Manulife Financial. The two financial entities are also cooperating as far as their participation with the PokerStars deal is concerned.

Canacord and Manulife, had co-led in underwriting Amaya’s subscription receipt offering, a form of financial instrument used by private companies to raise funds. In the case of Amaya, which is a publicly traded company, the funds raised were used to satisfy the financial considerations of what is regarded as a private activity of acquiring the privately held shares of the Oldford Group.

Following the initial announcement of the Oldford acquisition, Amaya Gaming shares reached an all time high of 42 percent at the Toronto Stock Exchange, to which price shares more than quadrupled in value, closing at CA$39.25. Last week, after Amaya confirmed the AMF investigation, the company’s shares went down by as much as 18.31 percent and had closed at CA$28.64 per share.

The Globe and Mail reports that an institutional investor had commented that the current AMF investigation is not unexpected, particularly to high yield investors who have awareness that such things occur from time to time. Thus, they still do not see the investigations as a cause for concern at the moment.

The newspaper likewise quoted Neil Linsdell, an analyst at Industrial Alliance, who said that around June of this year, although there was already some market rumors of the Canadian company gearing up for a major acquisition, only a few had entertained the thought that Amaya was targeting to buy a company as large as the PokerStars online poker business. Lindell remarked that at that time, it was clear the iGaming company was preparing for an acquisition, but PokerStars to him was a bit bigger than what he had in mind. The official announcement of the Amaya-Oldford acquisition agreement, thereafter, actually came as a shock to him.

Some described the AMF arrival at the Pointe-Claire headquarters as a raid of some sort, because the members of the Royal Canadian Mounted Police (RCMP) accompanied the investigators. However, a RCMP spokesperson explained that they were part of the entourage only as a form of security and not as part of the investigating team.