Slots Online Canada Home PageNewsApollo Global Goes All-in With $2.5 Billion Bid For Great Canadian Gaming Casinos

Apollo Global goes all-in with $2.5 billion bid for Great Canadian Gaming casinos

  • Published date23 November 2020

Great Canadian Gaming Corp (GCG), a Canadian gaming, entertainment, and hospitality brand recently announced that it had signed off on being acquired by Apollo Global Management, a US-based private equity fund manager.

Apollo will acquire all GCG's shares for C$ 3.3 billion (US$ 2.52 billion), an offer that several shareholders have criticised as being too low.

Once the agreement was signed, the Canadian operator advised that its headquarters would stay in Toronto and would be "managed by a Canadian management team and members of the Canadian board."

Apollo expressed that it is "committed to maintaining the company's current operating footprint and anticipates that Great Canadian properties will increase under the ownership of Apollo Funds."

GCG's scope of business includes 25 properties across four Canadian provinces. Most of its gambling halls are in Ontario and British Columbia and its River Rock Resort.

The COVID-19 pandemic necessitated the closure of casinos country-wide during the spring. Ontario managed briefly to reopen its casinos under capacity restrictions, but safety concerns meant that they had to close again soon after. The British Columbia provincial government will decide when casinos will be permitted to reopen with several limitations in place.

The perception that Apollo's purchase offer for GCG's shares is significant is not shared by independent investment advisory firm, Toronto Bloombergsen Investment Partners. The firm owns 14% of GCG's capital and has openly stated that it thinks Apollo's offer undermines the casino operator's actual value.

Bloombergsen's reservations have been echoed by two other minority shareholders of GCG, namely, Breach Inlet Capital Investors and Madison Avenue Partners.

The casino operator's presence in Ontario is significant so it would make sense for it to take advantage of the province's new plan to allow private online gambling sites to compete with the province's PlayOLG site which currently holds a monopoly on gambling.

Despite the agreement being final, GCG's shareholders could still change the course of things as they have the opportunity to vote on the offer from Apollo as part of a special shareholders meeting in December, the date of which has not been announced as yet.

Apollo has been making significant moves into the gaming industry, recently announcing the purchase of a €500 million stake in Sazka Group, a Czechoslovakian lottery and betting operator.

GCG reported results for its third quarter showed a net operating loss of C$ 36.5 million with a negative free cash flow of C$ 54.8 million. The company also reported that it maintains cash funds of C$ 472 million with another C$ 1.06 billion in an unused available credit line.

GCG shareprice Bloomberg

Great Canadian Gaming share price surgedas investors hit back at Apollo bid. Source: Bloomberg