PokerStars to go public without launching an IPO
Amaya Gaming Group Inc.'s recently announced deal to buy online gaming giant PokerStars for nearly 5 billion dollars is being seen as a `reverse acquisition'.
Montreal-based Amaya Gaming has a market value of around $177 million, but it has agreed to acquire PokerStars, the biggest and most popular name in the online gaming industry, for $4.9 billion.
Amaya Gaming is a publicly owned company, while PokerStars is a much larger private company. When a publicly owned company acquires a larger private company, it is called reverse acquisition as the private company become public without launching an IPO.
The deal surprised many analysts and industry experts. During Amaya Gaming's recent conference call, an investment reporter said, "I have never seen a company doing anything like this." The reporter was apparently surprised at the massiveness of the deal, given the Montreal-based company's smaller market value.
Amaya, which is a New Jersey-licensed service provider, publicly trades on the Toronto Stock Exchange. While New Jersey's gaming enforcement director David Rebuck said he was excited at the deal as it would expand opportunities in New Jersey.
Adam Krejcik, a gaming analyst at Eilers Research, said the deal could land PokerStars in New Jersey. But for California, he predicted that the Golden state would keep on hanging out a "No Entry" sign.
The deal is expected to be finalized by the end of September this year.
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