(Adds statement from companies)
By John Tilak and Alastair Sharp
TORONTO Oct 7 Canadian online gambling company
Amaya Inc and British bookmaker William Hill
Plc said they were in talks to combine in a merger of
equals, confirming a Reuters report about the discussions
earlier on Friday.
The all-share merger would be "consistent with the strategic
objectives" of both companies, they said in a joint statement.
Amaya has received strong buyout interest from other
companies in the industry and some private equity firms, two
sources familiar with the situation said.
The statement did not mention GVC Holdings Plc, a
sports betting and gaming company based in the Isle of Man which
the sources had also cited as a suitor. The sources spoke on
condition of anonymity because they were not authorized to
discuss the matter publicly.
GVC did not respond to a request for comment.
The sources also said that former Amaya Chief Executive
David Baazov, subject of an insider trading investigation from
Quebec's securities regulator, had abandoned plans to bid for
the company. Amaya said in February it had received a nonbinding
proposal from Baazov to take the company private, but the formal
bid never came.
The bids for the operator of online gambling website
PokerStars were above Baazov's planned offer price of C$21 per
share, the sources said.
Amaya's stock jumped on the Reuters report and trading was
halted within minutes, at C$23.41, up 9.1 percent on the day, in
Toronto. The level was the highest in about 11 months. The
company had a market capitalization of about C$3.1 billion
($2.34 billion) before the rally.
Baazov had prepared a bid but waited to sort out issues with
the securities regulator before submitting it, the sources said.
He was mulling a bid as recently as the summer, they said.
Baazov resigned as CEO in August and was replaced by Rafi
William Hill, itself a subject of an approach from 888
Holdings and Rank Group, rejected a revised
takeover bid from the two rivals in August.
Amaya paid $4.9 billion to acquire the owner and operator of
the PokerStars and Full Tilt Poker brands in 2014, saying at the
time that the deal created the largest publicly traded online
The company's biggest revenue contributions are from the
Isle of Man and Malta, while it has also expanded into France,
Italy, Spain and Britain, and expects to soon gain regulatory
approval to operate in the Czech Republic and the Netherlands.
It sees its biggest growth opportunity in the United States.
After a lengthy approval process, Amaya won permission to
operate PokerStars in New Jersey, one of the first U.S. states
to legalize the business.
The company last year limited the operations of its
StarsDraft fantasy sports business in most U.S. states as a
string of jurisdictions grapple with whether the fast-growing,
multibillion-dollar industry constitutes illegal gambling.
Contests such as StarsDraft, in which players draft fantasy
teams for sports including football, basketball and baseball,
have drawn increased scrutiny from regulators since last year.
($1 = 1.3256 Canadian dollars)
(Reporting by John Tilak and Alastair Sharp in Toronto, and
Paul Sandle in London; Editing by Grant McCool and Richard