Bloomberg reports that Toronto-based Burgundy Asset Management Ltd., the no. 3 holder of the Canadian casino operator, will vote against the deal.
“We believe Great Canadian’s Ontario assets are irreplaceable properties for which Apollo’s C$39 offer reflects only a fraction of their potential value,” Burgundy portfolio managers David Vanderwood and Andrew Iu said in a letter obtained by Bloomberg.
Burgundy believes that Apollo has capitalized on the Covid-19 pandemic to offer a lowball price. Apollo’s offer of $C39 a share is 33% above GCGC’s current trading price of $29.20.
GCGC’s board unanimously approved the deal but investors BloombergSen Investment Partners and CI Financial Corp quickly criticized the decision, arguing that Apollo was undervaluing the company based on depressed revenue numbers.
GCGC will have to wait awhile before numbers return to pre-pandemic heights. The company was forced to temporarily close two casinos in Ontario this week after parts of the province implemented a four-week lockdown to limit new Covid-19 cases.
The affected properties are Casino Ajax and Great Blue Heron Casino.
“Great Canadian is committed to providing a safe environment for both its guests and team members and introduced significant health and safety protocols as part of the reopening of the Company’s properties in Ontario and New Brunswick on September 28, 2020, followed by its properties in Nova Scotia on October 5, 2020,” the company said in a statement.
“Great Canadian will continue to support the efforts of provincial and municipal governments, public health authorities and Crown partners in preventing the spread of COVID-19.”
