Apollo Global Management to splash cash in £1.9bn Great Canadian Gaming deal

Apollo Global Management has continued its online gambling spending spree by sealing a C$3.3bn (£1.9bn) deal for a majority stake in Great Canadian Gaming Corporation (GCGC). Under the terms of the deal, the private equity firm will acquire all outstanding shares in the Canada-based operator at a price of C$39 (£22) per share, representing a 59% premium on GCGC’s share price. The deal has been unanimously approved by GCGC’s board of directors and will be put to a wider shareholder vote at a special meeting in December. “Apollo is committed to maintaining the company’s current operational footprint and anticipates Great Canadian’s properties will increase under Apollo’s ownership,” Apollo said in a statement. GCGC’s current management team will remain in place following the acquisition. The private equity giant expressed its aim of driving “additional incremental growth” by expanding GCGC’s non-gaming facilities and expanding its loyalty and marketing programmes. In addition, Apollo revealed its intention to make “gaming improvements that leverage the scale of the firm’s platform”, citing the potential for other Canada-based funds to invest in the business. “Apollo also anticipates that certain Canadian institutions may co-invest in the transaction to become equity owners in the company alongside the Apollo Funds upon completion of the acquisition,” Apollo said. The multi-billion-pound deal is Apollo’s second major foray into the online gambling sector this month following a €500m investment in Czech lottery operator Sazka Group. GCGC operates 25 gaming, entertainment and hospitality facilities in Ontario, British Columbia, New Brunswick and Nova Scotia, making financial contributions to several charities based in the region. “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,” Apollo partner Alex 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 is safe to do so,” Van Hoek added. However, minority shareholders in GCGC, including Toronto-based Bloombergsen Investment Partners which owns a 14% stake, has confirmed its intention to vote against the takeover offer as it believes the price grossly undervalues the long-term potential of the business. Apollo is also rumoured to be readying a bid for William Hill’s non-US business, having been rebuffed in its initial bid to acquire the entire Hills portfolio in September.