December 14, 2020 Casino, Land-Based

Apollo mulls higher GCGC bid after shareholder opposition

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According to reports from Bloomberg, Apollo Global Management is considering an increase on its $2.5bn bid to acquire operator Great Canadian Gaming Corp (GCGC).

The private equity firm made its original offer earlier this year, but it has since faced opposition from a number of GCGC shareholders who consider the value of $39-per-share too low.

The main opposition comes from Toronto-based BloombergSen Inc, GCGC’s second largest shareholder with 14% of total company shares, and CI Financial, the largest shareholder with 17.5%. BloombergSen Inc is not associated with Bloomberg LP.

In a phone interview with Bloomberg in November, Sanjay Sen, president and co-founder of BloombergSen, said GCGC is “not in need of a sale as it’s still making money and not bleeding cash.”

If they went ahead with the proposed deal, Sen said GCGC’s owners would be “selling a Canadian monopoly asset at rock bottom prices to foreign buyers.”

GCGC’s shareholders also said the offer took advantage of a drop in share price as a result of the COVID-19 pandemic.

Meanwhile, Apollo has defended its $2.5bn offer, arguing that the pandemic may have reduced GCGC’s value in the long-term. Currently, GCGC has been forced to close 19 of its 26 properties as a result of the pandemic.

According to sources close to the matter, if Apollo were to revise its offer then it would stay within the range of $38 to $41-per-share. However, the company may also walk away from the deal if its bid is rejected again at an upcoming shareholder meeting on 23 Dec.

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