Amaya Gaming Canadian Offices Raided in Securities Trading Probe

3 min read

Amaya Montreal offices raided
Amaya Gaming’s offices in Montreal, which were raided by authorities this week. Amaya says it is cooperating with the investigation. (Image: AP)

Amaya Gaming’s Quebec offices were raided by Federal Canadian police and provincial financial market regulators on Wednesday as part of an investigation into trading activity in the lead up to the company’s $4.9 billion June acquisition of the Oldford Group, parent company of the Rational Group, which owns PokerStars.

Authorities also showed up at Canadian investment bank Canaccord Genuity, as well as Canadian insurance firm Manulife Financial, as part of the same investigation.

Amaya’s stock rose rapidly in the weeks prior to the announcement of the summer takeover, suggesting something was going on behind the scenes. Meanwhile, rumors of the deal were reported in the gambling press a full three weeks before it was publicly made official. On the Friday before the rumors were first publicized in the press, stock shot up by nearly 14 per cent.

“[This] operation is part of an AMF investigation on that company. I can’t go further for the moment,” said Sylvain Théberge, a spokeman for Autorité des Marchés Financiers, which regulates Quebec’s financial markets.

Amaya Responds

Amaya released the following full statement on Wednesday night: “To provide clarification on a media report, Amaya Inc. (the “Corporation”) (TSX: AYA) confirmed that the Corporation and its officers are cooperating with the Autorité des Marchés financiers, the securities regulatory authority in the Province of Quebec (the “AMF”), in an investigation with regards to trading activities in Amaya securities surrounding the Corporation’s acquisition of Oldford Group in 2014.

“To the Corporation’s knowledge, this does not involve any allegations of wrongdoing by the Corporation. Amaya will continue to cooperate, if and as requested, consistent with our practice to always cooperate with regulatory authorities. The Corporation will continue to monitor the investigation if and as it proceeds. The investigation has had no impact on Amaya’s business operations, employees or companies.”

In a separate statement, a Manulife Financial spokeswoman said: “We are aware of the actions taken yesterday by the AMF and RCMP and are fully cooperating with this investigation.”

Taking Stock

Amaya, which is listed on the Toronto Stock Exchange, was one of the success stories of the financial markets in 2014, with shares of the company rocketing by 340 percent over the course of the year, largely as a result of the PokerStars acquisition.

The deal, which transformed Amaya from a relatively unknown online gaming services provider to the biggest online gambling company in the world, was backed by the credit division of Blackstone Group, the world’s biggest private equity firm, and was funded primarily through debt financing.

Back in May, before the acquisition, as its share prices soared, Amaya tried to play down the market rumors, although it didn’t exactly deny them either.

“Strategic acquisitions have been and are one component of the company’s growth strategy and … from time to time, this process leads to discussions with potential acquisition targets. There can be no assurance that any such discussions will ultimately lead to a transaction. As a general policy, Amaya does not publicly comment on potential acquisitions unless and until a binding legal agreement has been signed. The company intends to make no further comment or release regarding current market rumours unless and until such comment is warranted,” an Amaya statement read last spring.

Related Posts

Did you know about our poker forum? Discuss all the latest poker news in the CardsChat forum

Popular Stories