Amaya to repurchase own stock to focus on PokerStars
Amaya Gaming has announced plans to repurchase some of its own stock and divest all its B2B assets in a move that will see it focus energies on maximising value for PokerStars.
Under plans unveiled yesterday (Monday), Amaya is to purchase and cancel up to 5,399,631 common shares, approximately 5% of the public float, over the next 12 months.
Amaya also announced that its buyback programme will be launched via a normal course issuer bid (NCIB) and will be part-funded by the proceeds of various divestments.
“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,” Amaya said in a statement.
The Montreal-based group added that selling off its other B2B assets would enable it to "examine strategic alternatives for these assets that will maximize shareholder value by facilitating the repayment of indebtedness and/or the repurchase and cancellation of the Corporation's common shares".
No definite timeline has been set for this process.
“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 NCIB is subject to acceptance by the Toronto Stock Exchange (TSX) (paywall) and, if accepted, will be made in accordance with the applicable rules and policies of the TSX applicable.”
Amaya will only be able to purchase up to 25% of the average daily trading volume of the common shares each day.
“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,” Amaya added.
Meanwhile, Amaya has announced that it has completed a deal to offload its B2B poker network Ongame Network to gaming solutions firm NYX Gaming Group.
Under the deal, which was first announced in November last year, Amaya has agreed to make an investment into NYX Gaming.
This will include strategic investment in the form of a subscription of an unsecured convertible debenture, which will mature two years after the date of issuance and bears interest at 6% per year, payable at maturity.
Interest and principal will be payable in kind in NYX Gaming common shares at Amaya's option.
NYX Gaming announced at the end of December that it had completed its initial public offering and its shares have begun trading on the TSX Venture Exchange under the symbol NSX.
Elsewhere, Amaya also revealed that it is still hoping to part ways with its Cadillac Jack B2B land-based gaming solutions business.
Amaya first announced in October that it was seeking alternatives for the asset, but will need approval from its own board of directors in order to split with the business.