Wall Street’s buyout fund Apollo Global Management is considering sweetening its $ 2.5 billion (C $ 3.3 billion) takeover offer for Canadian casino operator Great Canadian Gaming, Bloomberg reported, citing people familiar with the matter.
It is also understood that Apollo could walk away from the proposed transaction, if it fails to obtain approval from Great Canadian shareholders during a December 23 meeting.
The private equity firm first approached the casino company in August. During negotiations, Apollo said it was considering an offer between Cdn $ 38 and Cdn $ 41 per share. Finally, he presented a offer of C $ 39 per share.
The private equity fund offering quickly faced massive opposition from large Canadian shareholders who complained that it was Too lowEspecially since the casino operator controls the gambling venues in the greater Toronto area.
Apollo is understood to be contemplating his approach and possibly increasing his offering. People familiar with the matter told Bloomberg that a revised offer would likely still be within the range of Cdn $ 38 to Cdn $ 41 per share.
Great Canadian operates 26 properties across Canada. Of these, 19 are currently temporarily closed as Canada struggles to contain an increase in Covid-19 cases.
Apollo ready to withdraw from the deal
Sources told Bloomberg that while Apollo may end up increasing its offer, not willing to overpay by Great Canadian due to the turmoil experienced by the casino industry during the pandemic and the future risks the crisis poses to the industry.
Apollo has not commented on recent reports of its takeover bid by the Canadian casino operator.
Great Canadian’s board approved the deal and said it would generate immediate significant shareholder value despite the negative effects of the worst health crisis the world has seen in many years.
The company’s shareholders are ready to vote on the transaction at a December 23 meeting. Apollo is expected withdraw from the agreement if you don’t get approval from investors instead of overpaying.
Some of Great Canadian’s shareholders criticized Apollo’s offer saying that undervalued the company and that they tried to take advantage of the fall in their share price since the pandemic rocked their operations in Canada.
If the private equity firm chooses not to make an offer that pleases investors, this would be his second unsuccessful attempt to acquire a large gaming company in recent months. It was again in August that Apollo approached British bookmaker William Hill with an informal takeover offer.
American casino giant Caesars Entertainment submitted a rival offer that William Hill accepted. Apollo said last month that already I was not interested in bidding for the gambling company, but that it could make an offer for its operations outside the United States, which Caesars intends to sell when the acquisition completes.