Last Wednesday, November 24, Amaya put out a statement saying that it was aware of the media coverage when one of the funders listed on Baazov’s SEC filing said that it knew nothing about the deal.
That bizarre event created rampant speculation about the credibility of Baazov’s funding. Amaya’s share price immediately took a downward turn.
Amaya’s board has now had time to check on the credibility of the two funders based in Hong Kong. And if it wasn’t able to reassure that the money was available, investors could legitimately have expected a message from the board early on Monday, November 28.
One rumor surfacing in the industry is that David Baazov was cheated by a financial intermediary who pretended to represent KBC Aldini Capital Limited, the funder which denied knowledge of the deal.
KBC Aldini is based in Dubai, and it is entirely possible that David Baazov tried to interest it in the deal via an intermediary. Such practice is standard in raising finance.
A multi-million dollar commission would be payable for a successful deal, and it may be that Baazov was defrauded and deceived by a false commitment note.
Whether this account of events is true or not, both Hong Kong investors have made no public comment.
The amendment filed with the SEC shows the amount of funds for which they have produced “binding equity commitment letters” at $3.45 billion.
This is only $200 million short of the $3.65 billion in the previous filing which included KBC Aldini and another company, Ferdyne Advisory Inc. The latter, is also no longer mentioned as a funder.
The implication is that the two companies which are not involved had only a minor position in the funding for the deal.
On Friday, November 25, Bloomberg quoted Head and Shoulder’s Chairman Stanley Choi saying: “We continue to support David Baazov.”
Choi is himself a well known high roller poker player, who won the Macau High Stakes Challenge for $6.5 million in 2012.
Mediarex founder Alex Dreyfus called OPR to comment on our last article on the Amaya bid. He pointed out that Head and Shoulders has invested in his company.
Dreyfus owns the Global Poker Index (GPI) and the innovative Global Poker League (GPL), which is heading for the end of its inaugural season.
At the time that he secured his last equity investment, Dreyfus, who was also one of the founders of French online poker giant Winamax, and Chilligaming, said:
“China will likely be the epicenter of the next Poker boom and this time the boom looks to be powered by eSports, the video game, media and sports industries. Thanks to our new investors we’ll be able to reach new strategic partnerships in China to help develop the sport of Poker there, creating a domino effect that has globally positive effects.”
That’s another perspective that argues in favor of Chinese interest in online poker. It also offers an investment rationale for Chinese investors to be interested in David Baazov’s bid for Amaya.
For Amaya and David Baazov the Thanksgiving weekend has been long, and short on relaxation.
But with a rational explanation for the KBC Aldini filing error, and the credibility of the Hong Kong funding established (even if by default), Baazov has emerged from the weekend looking like a serious bidder for Amaya. Again.