Apollo Global offers CAD$3.3bn to acquire Great Canadian Gaming Corp

12th November 2020 2:29 pm GMT

US investment fund Apollo Global Management has entered into a definitive agreement to acquire Toronto-listed land-based casino operator Great Canadian Gaming Corp. in a deal worth CAD$3.3bn.

Funds managed by affiliates of Apollo will acquire all the outstanding shares of Great Canadian common stock for $39.00 per share, as part of a transaction with a total enterprise valuation exceeding $3.3bn.

In a busy week for the investment fund, the move to acquire Great Canadian, which operates 25 gaming venues across Canada, follows confirmation that Apollo will not be submitting a bid to acquire British bookmaker William Hill, but will acquire a stake in European lottery and gaming operator SAZKA Group for €500m.

“The board of directors, based on a recommendation from the special committee of independent directors, has unanimously concluded that this transaction represents the best course of action for the company,” said Great Canadian CEO Rod Baker. “Factoring in our long-term prospects, this transaction will unlock value for our shareholders at a significant premium to our current share price.”

Following closing of the transaction, Great Canadian will remain headquartered in Toronto, led by a Canadian management team and with Canadian board members. Apollo also anticipates that certain Canadian institutions may co-invest in the transaction to become equity owners in the company, alongside Apollo.

“We are pleased that this transaction represents a great opportunity for our shareholders, while continuing to support the success of the business longer term,” continued Baker. “We believe this transaction is beneficial for our shareholders, our team members, our guests, and other stakeholders as we continue to execute on our operational and development plans into 2021 and beyond, while we navigate through this volatile time.

“In addition, 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,” concluded Baker.

Apollo said it was committed to maintaining Great Canadian’s current operational footprint and expects to increase the number of properties in operation.

“Great Canadian is a leader in the gaming and entertainment industry and, based on our experience and knowledge of the space, we see opportunities to work with their talented team to drive additional growth and value,” said Apollo partner Alex van Hoek. “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.”

The transaction has been approved unanimously by Great Canadian’s board of directors, which has recommended that shareholders vote in favour of the transaction at a special meeting of shareholders, which is expected to be held in December.

A number of minority shareholders look likely to vote against the deal however, arguing that the offer from Apollo doesn’t provide a true long-term value of the company’s shares.

Shares in Great Canadian Gaming Corp (TOR:GC) soared by 34.56 per cent to close at $38.90 per share in Toronto Wednesday.

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