American equity firm Apollo Equity put forth an offer to buy the Great Canadian Gaming Corporation (GCGC) for $3.3 billion, in effect agreeing to pay $39 per share for the property.
The offer was approved unanimously by the GCGC Board with CEO Rod Baker saying, “We believe Apollo’s extensive experience in the gaming sector will provide additional strategic benefits to help expand our gaming and hospitality offerings and to secure our position as a long-term market leader.”
The GCGC Board may have been happy with the Apollo offer, but the minority shareholders were not. Investment firm Bloombergsen Investment Partners, an investment counselling firm that is based in Toronto holds 14% of the equity of GCGC, with President Sanjay Sen saying, “This is a terrible and ridiculous idea. We will vote against this transaction.” This firm’s members believe that the value of the GCGC stock is worth a lot more in the long run.
There are two other minority shareholders who will also vote against the buyout. Based in the United States, Madison Avenue Partners, a hedge fund, and Breach Inlet Capital, an investment firm, have both expressed their dismay of the Apollo offer. As well as being against the amount per share of the offer, as deemed to be too low, the minority shareholders are also angry that GCGC did not look for other investors who would perhaps have made a better deal for the company.
The Apollo buy-out will be put to a vote at the GCGC shareholders meeting to be held in December.
GCGC – A Canadian household name
GCGC has been in the gaming and hospitality business for 35 years and employs over 9,400 people. Monies earned by GCGC goes to local governments to aid programs in health, education and social services and the company also invests in community projects.
It has 25 establishments across Canada from British Columbia to Ontario and in New Brunswick and Nova Scotia. Most operations were suspended in March 2020 as Covid-19 struck, but the casinos in Sydney and Halifax, Nova Scotia opened October 5th and Elements Casino Chilliwack in British Columbia opened November 1st.
Casino Woodbine in Toronto and Casino New Brunswick were opened but had to shut down under a government-mandated suspension due to Covid-19. The elaborate River Rock Casino Resort in Richmond, British Columbia is under the spotlight of the Cullen Commission inquiry into money laundering and has not yet had approval to reopen.
What does Apollo Global Management do?
Apollo Global Management Inc. is an American private equity firm named as a leading global alternative investment manager, founded in 1990, with offices around the world. Sites include New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Singapore, Hong Kong, Shanghai and Tokyo.
The company has under management assets of $443 billion and seeks to provide profits for investors.
An Apollo banner states the firm’s recognition of the importance of environmental, social and governance issues and promotes diversity, sound practices and public engagement. In this pandemic period, Apollo and its portfolio companies have donated more than $50 million in global relief efforts.
Photo – River Rock Casino Resort/gcgaming.com