Amaya Group to Repurchase Own Stocks, Move to Benefit Shareholders

In 2015, Amaya continues its corporate moves towards increasing profits and the latest news is that the company is buying back shares for cancellation to benefit the shareholders.

The Amaya story was the biggest one of 2014, with its 4.9 billion takeover of the Rational Group with PokerStars and Full Tilt in June last year.

After this takeover, Amaya shares rose by 254.7%, a steep rise from its value of $1, when the company had debuted in 2010. Now, the company has stated that it intends buying back 5,399,631 common shares, approximately 5% of its public float, over the coming year, for cancellation. This buy-back plan is expected to be partially funded by certain investments and will be conducted through a normal course issuer bid (“NCIB”).

A press release by Amaya explained the move, stating that, “Amaya believes that its current share price does not reflect the underlying value of the Corporation, and that purchasing shares for cancellation will increase the proportionate interest of, and be advantageous to, all remaining shareholders. The Corporation intends to buy back common shares for cancellation from time to time when it determines the price at which they are trading is undervalued and that such purchases provide the best use of available cash.”

The company’s “Notice of Intention to Make a NCIB” requires approval by the Toronto Stock Exchange, to begin the buyback program. According to the law, Amaya can only purchase 25% of the average daily trading volume of common shares a day. The law states, “the Corporation may make, once per calendar week, a block purchase of common shares not owned, directly or indirectly, by insiders of Amaya that exceeds the daily repurchase restriction.”

It is to be noted that late 2014, Amaya entered into a deal with NYX Gaming Group Ltd, which involved the later taking over Amaya’s B2B poker and platform provider, Ongame Network Limited. The deal includes investment from Amaya in return for interest and principal payable in shares, as NYX Gaming Group went public in Dec 2014.

Besides the above, Amaya is still seeking to offload its B2B land-based gaming solutions business,Cadillac Jack Inc. However, this move can occur only after approval from its Board of Directors.

The Amaya press release went on to state that the company was on the lookout for strategic opportunities to divest its B2B assets. It said, “The intention is to examine strategic alternatives for these B2B assets that will maximize shareholder value by facilitating the repayment of indebtedness and/or the repurchase and cancellation of the Corporation’s common shares. There is no timeline for this process. The Corporation will provide further updates if and when they are required or as appropriate.”

Amaya is certainly showing no signs of stopping in 2015, even as no news emerged from the official raids conducted at its HQ during the last days of 2014.