Jason Ader, an activist, investor, and CEO of SpringOwl has dismissed David Baazov’s bid for Amaya Inc., terming the bid as ‘suspicious.’ The Amaya Inc. shareholder further urged the company executives to completely cut ties with Mr. Bazoov, the former chief executive officer of Amaya. Jason Ader, through his company, SpringOwl, controls about 2% of Amaya’s shares. In a letter addressed to Amaya Inc.’s board, Ader urged the company officials to let go of the former CEO’s ‘undue influence,’ as reported by Canadian corporate news sources.
The issue came up after the Bazoov’s $ 4 Million bid for the company, which Ader claims is too low and Bazoov needs to make the source of his finances more transparent. Jason Ader further attacked Bazoov’s credentials accusing him of trying to take advantage of the company’s current situation at the expense of fellow stakeholders. He also accused Bazoov of ruining Amaya’s track record having been charged with several counts of fraud. The public rejection from the New York investor further complicates Bazoov’s proposal to acquire the company for 6.7 billion Canadian dollars.
Earlier on, one of Bazoov’s bankers in the deal to acquire Amaya, KBC Aldini Capital, denied any ties to Bazoov or Amaya, and even claimed to have no knowledge of the deal forcing Bazoov to re-submit his official filing at the US Securities and Exchange Commission. However, the resubmitted filing pledged more financial commitment from two of his initial financiers; Goldenway Capital and Shoulders Global Investment Fund, both based in Hong Kong.
Level the Playing Field
Ader points out that the company should only be sold if the playing field is leveled, which would attract more potential investors. Bazoov’s bid only seeks to achieve the opposite. However, Ader continued to insist that it is not the right time to sell the company. He said that the company’s recent sports betting and casino investment would produce short term profits which will show potential investors the true value of the firm. Sighting the company’s EBITDA multiple of 11.9 in successful gaming transactions, Ader continues to believe that Bazoov’s offer highly undervalues the company. He said that if the company follows his strategic plan, it will deliver better shareholder value. He also pointed out several issues with the board’s strategic initiatives and governance decisions as well as poor communication between the board and the shareholders.
Amaya is yet to give a formal reply to Jason Ader’s letter. The public rejection of the offer by a major shareholder will definitely give the board a hard time convincing other shareholders to agree to the sale.