The Former CEO Has Offered to Buy the Canadian Gambling Company Amaya

David Baazov, the former Chief Executive of Amaya Inc., has offered to buy the Canadian online gambling company in a deal that is valued at about C$3.48 billion ($2.56 billion).

The company is Toronto-listed and its stock rose by as much as 18.27% in morning trading at C$21.69. However, this was still below the offer price of C$24 per share. The offer represented a premium of 30.9% to Amaya's Friday close.

Amaya, which also reported better than expected results on the following Monday, said it would be considering Mr. Baazov's offer.

Mr. Baazov already owns approximately 17.2% of Amaya, including options. He said that he made the offer on behalf of a soon-to-be-formed entity which will be led by him.

The offer, which includes debt and transaction costs, is valued at about $6.7 billion, said Amaya in a regulatory filing.

The equity portion of this deal could be as much as $4.1 billion and it will be mostly financed by four funds that have committed $3.65 billion plus Mr. Baazov's shares.

A Macquarie research analyst, Chad Beynon, said that he thought a lot of groups would like to have this business. He stated that Mr. Baazov was placing a much higher valuation on the company than the industry.

Mr. Baazov stated that the soon-to-be-formed entity is willing to pay $200 million of the $400 million deferred purchase price that Amaya had to pay for its acquisition of Rational Group. He added that the entity will be releasing funds in advance should the payment be due before the deal closes.

Amaya, the owner of gambling websites PokerStars and Full Tilt, stated that in February it had received a non-binding proposal from Mr. Baazov to take the company private for C$21 per share.

Two months after Mr. Baazov made the offer, he was charged with insider trading by Quebec's securities regulator. The company then said that Mr. Baazov was taking an indefinite paid leave of absence.

These charges came after an investigation into Mr. Baazov and other executives during 2014 for trading Amaya's stock prior to the company's $4.9 billion takeover of PokerStars.

Amaya's total revenue rose 9.5% to $270.8 million from $247.3 million, which is marginally higher than the average analyst estimate of $270.1 million.