Surprisingly, Canadian Amaya Gaming Group which has been buying Cryptologic shares and already has 7% of the company in possession has completed an agreement about buying Chartwell Technology Inc, which is CryptoLogic’s competitor. Amaya claimed that they add together their products, technology and human resources in order to improve their placement in the ground-based and online gaming market.
Both companies will keep on maintaining their present businesses, providing widened product range and improved technologies and proficiency as a result of the transaction. According to the agreement, a fully owned branch of Amaya will buy all Chartwell’s issued and outstanding common stock via plan of arrangement in accordance with the Alberta Business Corporations Act. This arm’s length transaction is worth about CAD$ 22.8 m.
For every Chartwell share its shareholders will get $0.875 in cash and 0.125 common stock of Amaya shares. They will be also given the right of election as one-half of the recompense for their shares in the form of Amaya shares, each worth $3.00 (maximum number of Amaya shares meant for Chartwell shareholders makes 3,825,197 which is about 9% of all Amaya shares). The Chartwell stocks are worth $1.25 for the arrangement purposes which exceeds their yesterday closing rate of $0.82 by 55%.
Darold H. Parken, Chartwell’s President and CEO, claimed that the alliance of Amaya and Chartwell was a remarkable partnership, beneficial for both the companies and their clients. He added that as a result they will expand product line, channel capability and market coverage. They are happy to join their performances and are looking forward to working as a team to make a highly developed world-wide gaming company and to improve client service.
Chartwell’s management has with unanimity decided that the transaction is fair to its stockholders and serves the company’s interests, approved it and recommended that Chartwell stockholders vote for the transaction. Members of Chartwell’s board and its executive officers, who collectively possess about 5% of the outstanding stock in the company, have concluded lock-up agreements with Amaya to vote their common stock for the agreement and at least another 20% should enter into such agreements till 27th of May.
The agreement, which is concluded according to customary Toronto Stock Exchange, TSX Venture Exchange and other official permissions, secures contractual consents and includes (but doesn’t boil down to it) the acceptance of minimum 66,67% of the votes given personally or by proxy at a meeting where Chartwell stockholders are meant to assemble in the beginning of July. The agreement has also to undergo the approval by the court according to the Alberta Business Corporations Act.
Under the terms of the agreement Chartwell will not demand or open any discussions on the pursuit of any other purchase proposals. The parties have also set a termination fee of 1 million dollars to be paid in other specified circumstances. Moreover, Amaya reserves the right to compete with any superior offer for Chartwell in the case such an offer is made. According to the agreement, Chartwell’s stock will be removed from the TSX list and the company will be run by its current board as a fully-owned Amaya subsidiary.
David Baazov, Amaya’s president and executive officer said that the future transaction is an important step in the company’s growth strategy. They are happy that both Amaya and Chartwell realize all the financial and strategic benefits of that partnership. He added that cooperation of the companies means increased stockholder value and development of complementary technologies and improved ability to cover target markets.
Stocks in Amaya Gaming Group Inc. have obtained 3.16 per cent to $2.94 for each share in Toronto according to the announcement and shares in Chartwell Technology Inc. are now trading at $0.82 for each share.
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