Apollo New Proud Owner Of Great Canadian Gaming In $1.96 billion deal

79% of Great Canadian Gaming’s shareholders approved the acquisition, and the board of directors voted unanimously, finalizing the deal at the end of 2020. Apollo Global Management raised its initial offer of $39 per share to $45 per share, giving investors a 60% plus return on the market rate at the time of the takeover. With returns like it’s no wonder, most shareholders were looking to agree to the deal and cash out their returns. Apollo will take control of the casino operator through vesting ownership interests in investor funds controlled by the international investment firms.

Apollo views the gambling market as offering large potential returns as Canadian interest in gambling surges combined with increased legalization, notably sports betting. As the online gambling market is growing at a faster rate and offers higher returns of investment than traditional casinos due to lower costs, investment firms may be interested in purchasing top online casinos such as PlayAmo.

As the shift of ownership is well underway, industry analysts have already started looking at how Apollo can ensure their latest investment is a success.

Must Tailor Services To Suit Local Market

Apollo has identified that a big part of the success of Great Canadian Gaming is their local expertise. Apollo has decided to keep the company headquartered in Toronto and retain the Canadian management structure and personnel.

What Changes Is Apollo Planning For The Casinos?

Apollo is keen to invest millions into developing the non-gambling facilities at the casinos. They have plans to build large hotels, increase convention space and build concert halls. Apollo plans on investing in nightclubs and new restaurants. The investment firm is keen to appeal to a wider range of potential customers who may not even be interested in gambling. They also want to provide their bettors with increased entertainment to keep them happy when they aren’t playing.

 The company wants to expand the number of table games offered and their loyalty/high roller programs in an effort to attract wealthy high-end gamblers.

Apollo is aware of the Great Canadian Gaming Corporation’s history of community outreach and donating to a vast amount of charities throughout Canada. Management has assured shareholders that this tradition will continue under their ownership.

Not All Are Happy With The Takeover

There is a strong minority that opposes the takeover move by Apollo. Even though the stock price soared after the announcement, investors such as Burgundy Asset Management believe that the offer of $45 by Apollo is still way too low and that the company is being undervalued. They thought a bid of $60 would be a suitable offer.

Another big investment firm from Toronto,  Bloombergsen Investment Partners, who have a 15% stake in the company, also believes the casino operator is incorrectly valued. They stated the current issues surrounding the business would be quickly taken care of, and the value should be based on the future of the casinos in a few years once operations are slightly modified.

This may be just a classic case of the buyer wants to pay as little as possible while the seller wants to get the highest price available. Apollo is a savvy operator, and they appear to benefit immensely from the takeover, especially if Canada legalizes sports betting as many expect.