Amaya’s Chairman and Chief Executive Officer David Baazov is taking an indefinite paid leave of absence from the company, effective yesterday.
Mr. Baazov is taking this leave voluntarily to focus on preparing an offer to acquire Amaya and to avoid a distraction for the company while he responds to certain allegations made against him by the Autorité des marchés financiers (AMF), the securities regulatory authority in Quebec. Mr. Baazov will remain a member of Amaya’s board of directors.
The Board has appointed Divyesh Gadhia as Interim Chairman, and Rafi Ashkenazi as Interim CEO. Mr. Gadhia has been an Amaya director since 2010, is the Board’s Lead Independent Director and is Chair of the Special Committee of independent directors established on February 1, 2016 to consider any proposal that may be made by Mr. Baazov, as well as other alternatives that may become available to Amaya. Previously, Mr. Gadhia served as the Chief Executive Officer and Executive Vice Chairman of Gateway Casinos & Entertainment Limited from 1992 until 2010, where he was responsible for strategic initiatives, regulatory matters and governmental relations.
Mr. Ashkenazi is currently CEO of the Rational Group, Amaya’s operating business, which includes the PokerStars and Full Tilt brands. Prior to becoming CEO of Rational Group in late-2015, Mr. Ashkenazi, an experienced gaming industry executive, served as Senior Vice President of Strategy for Amaya during 2015 and as Chief Operating Officer of Rational Group from January 2013 until early 2015, responsible for all customer-facing product and back-office functions for PokerStars and Full Tilt, including marketing, customer support, poker room management, IT management, payment processing and security, and game integrity. Prior to joining the Rational Group, Mr. Ashkenazi was Chief Operating Officer of Playtech, a global gaming software company.
On March 23, 2016, Amaya announced that the AMF had charged Mr. Baazov with aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of securities of Amaya and communicating privileged information.
Subsequent to that announcement, the Board became aware of a decision of the Bureau de Decision et de Revision, the administrative tribunal in Quebec that hears certain AMF applications, which discloses additional AMF investigations into the alleged conduct of Mr. Baazov and others which are beyond the scope of the charges and of the internal investigation referred to in Amaya’s March 23rd announcement. While none of these allegations have been proven, the Board takes them seriously and has expanded the mandate of the Special Committee to investigate these additional matters.
Mr. Baazov has recently advised Amaya that he continues to intend to make an offer to acquire the company. Earlier this month, Amaya entered into an agreement with Mr. Baazov setting out the terms upon which he and his prospective co- investors and financiers may have access to certain confidential information about the company in connection with his intended offer. To date, Amaya has not received an offer from Mr. Baazov.
As previously announced, the Special Committee has a broad mandate to consider any proposal that may be made by Mr. Baazov, as well as other alternatives that may become available to Amaya. In this regard, the Special Committee had, prior to the charges being brought by the AMF against Mr. Baazov, instructed its financial advisor, Barclays Capital Canada Inc., to begin contacting other parties who might be interested in a transaction involving Amaya. The Special Committee is in the midst of negotiating agreements with certain of these parties with respect to the terms upon which they may have access to confidential information regarding the company.
As previously announced, the Special Committee has also retained Moelis & Company as a valuator to prepare a formal valuation of Amaya’s securities as required under applicable Canadian securities laws in the event that Amaya enters into a sale transaction with Mr. Baazov. Such valuation would be included in any information circular distributed to shareholders in connection with an offer, if any, from Mr. Baazov.
The Special Committee has not made a determination as to whether a sale of Amaya is in the best interests of the company at this time. The Special Committee will consider any offer made by Mr. Baazov and any expressions of interests made by third parties if and when any such offers or expressions of interest are made. The Special Committee will also continue its review of alternatives available to Amaya, including continuing to implement its current business plan as a publicly-traded company.
Mr Baazov provided the following statement: “As always, I continue to be dedicated to doing the right thing for Amaya and all its stakeholders. I believe that stepping down in the short term will help to avoid distraction for the company and its management while I vigorously contest all allegations made against me and pursue my bid to acquire the company.”