Price Hike Makes GCGC Take-Over Likely

By Ben Hamill - May 14 2021
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Price Hike Makes GCGC Take-Over Likely

Following financial and asset vehicle Apollo Global Management Inc.’s concession to increase the price of its bid for purchasing Great Canadian Gaming Corporation, a takeover is beginning to look more likely than ever before. The NY-based private equity powerhouse is now offering a 15 per cent increase of its initial bid for taking over the Canadian casino operator, with the latest offer on the table amounting to an impressive $2.52 billion.

The conversations surrounding the proposed takeover have been elaborate and ongoing ever since Apollo Global first made the offer in mid-November last year. The idea behind the acquisition is for the Canadian casino games leader to receive a much-needed injection for improving its gambling and hospitality offerings.

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Appeasing The Opposers

Initially an offer to the value of CA$2.1 billion on the table in terms of Great Canadian Gaming common stock, the hike to $2.54 billion is quite the considerable climb.

The parties were sent back to the drawing board after several large and key stakeholders in the Canadian gaming operator expressed concern and discontent over an offer they considered too low.

Among those opposing the offer had been Bloombergsen Investment Partners. Based in Toronto, the firm owns a 14 per cent share in the casino gams leader. Bloombergsen based its argument on how the enormous effects of the global health crisis had taken their toll on the current economic climate, and how those effects were directly affecting especially the local gaming industry.

Also party to the decision to increase the bid had been the expectation that Great Canadian Gaming Corp will soon enter into a process of country-wide recovery as restrictions begin to ease up – not to mention the already ongoing construction of several new casino venues and big-money complex developments.

15% Hike A World’s Difference

Instead of the previously tabled price of $39 per GCGC share, the new price on the table is a considerably higher price of $45 per share, which essentially marks an increase of 15 per cent in terms of value.

The increased offer on the table appears to sit much more favourably with key shareholders than what the old price did. And the approval of stakeholders with 50 per cent of the stock is beginning to make the takeover look like something of a very near done deal.

The final vote will go to the ballots on December 23 this year, giving all involved parties and stakeholders the opportunity to weigh in for one last time on the acceptability of the offer.

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