Private equity giant Apollo Global Management has agreed to acquire land-based operator Great Canadian Gaming Corporation in a deal worth more than CAD$3.3bn (US$2.51bn).
Under the deal, Apollo will purchase all of the outstanding shares of Great Canadian’s common stock for CAD$39.00 per share, using funds managed by affiliates.
Should the acquisition go ahead as expected, Great Canadian will continue to be based in Toronto and led by a Canadian management team and with Canadian board members.
Apollo said it anticipates certain Canadian institutions may also co-invest in the transaction in order to build up equity in the business upon completion of the acquisition.
The deal remains subject to a number of approvals, but has already secured the backing of the Great Canadian board of directors, which voted unanimously to support the proposal.
The board also recommended that shareholders vote in favour of the transaction at a special meeting of shareholders, which is due to take place next month.
“We believe that this transaction is beneficial for our shareholders, our team members, our guests, and other stakeholders as we continue to execute on our operational and development plans into 2021 and beyond, while we navigate through this volatile time,” Great Canadian chief executive Rod Baker said.
“Factoring in our long-term prospects, this transaction will unlock value for our shareholders at a significant premium to our current share price.”
Setting out its plans for Great Canadian, Apollo said it intends to drive additional growth through initiatives such as expansion of non-gaming facilities, expanded loyalty and marketing programs, and gaming improvements.
Apollo partner Alex van Hoek added that a core aim for the private equity giant would be to offer an enhanced experience to customers across Canada.
“Great Canadian is a leader in the gaming and entertainment industry and, based on our experience and knowledge of the space, we see opportunities to work with their talented team to drive additional growth and value,” van Hoek said.
“We also recognise the challenges of the current circumstances and are committed to working with the management team, regulators and health authorities to allow the Company to reopen its properties as soon as it’s safe to do so.”
The deal marks Apollo’s second major gambling-related agreement this week, with the private equity firm on 10 November having also announced that it is to invest €500m (£449.4m/$590.7m) in Sazka Group and KKCG, the investment body behind the pan-European lottery and gaming giant.
Subject to certain closing conditions, the funds will be affected through an investment into Sazka Entertainment AG, a new wholly owned subsidiary of KKCG. Sazka Entertainment will be the 100% owner of Sazka Group upon closure of the deal.
Also this week, Apollo announced that it will not make an offer for William Hill, leaving Caesars Entertainment to acquire the betting operator.
Apollo had initially submitted a rival bid to Caesars’ £2.9bn offer, but William Hill’s board unanimously and unconditionally recommended the Caesars offer.
The announcement is binding for six months under the City Code on Takeovers and Mergers – a binding set of rules for UK-listed businesses – except for certain exceptions. These include that Apollo may bid for William Hill’s non-US business if Caesars sells this to focus on the US arm.