Skip to main content
Complete Olympic Games coverage at your fingertips
Your inside track on the Olympic Games
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Complete Olympic Games coverage at your fingertips
Your inside track onthe Olympics Games
$1.99
per week
for 24 weeks
// //

CI Financial Corp. does not support a $2.1-billion takeover bid for Great Canadian Gaming Corp. and will vote against the deal, putting the proposed private-equity buyout in limbo one week before its scheduled shareholder vote.

CI is a major shareholder of Great Canadian with a 14.1-per-cent stake and in a statement late Wednesday the money manager said it is “not supportive of the proposed plan of arrangement” between private-equity giant Apollo Global Management Inc. and Great Canadian.

A number of top Great Canadian shareholders had already come out against the deal. Burgundy Asset Management Ltd., the third-largest shareholder with a 9.5-per-cent stake, already said it plans to vote against the deal and BloombergSen, which has a 14.5-per-cent stake, has said the same.

Story continues below advertisement

For Apollo’s bid to succeed, the New York-based private-equity firm requires holders of two-thirds of the stock to vote in favour of the $39-a-share offer. With CI’s announcement, at least 38 per cent of the company’s shares will be voted against the deal. However, it is possible that Apollo will amend the terms of its bid and convince some shareholders to change their minds.

Early opposition to the takeover was rooted in the timing of Apollo’s announcement, as well as frustration about executive compensation under the proposed takeover. As it stands, Great Canadian chief executive Rod Baker is set to receive $24.9-million in cash from the deal, which includes a $6-million deal bonus.

In a letter, Burgundy has said the COVID-19 pandemic put pressure on Great Canadian’s shares because casinos were forced to close across the country. That led, the firm argued, to Apollo presenting an “underwhelming, unsolicited bid.” Meanwhile the industry’s fortunes in other regions have shown that demand for gambling will not suffer long-term damage.

With the shareholder vote set for Dec. 23, more uncertainty was brewing this week, with one sizeable shareholder calling out Great Canadian’s disclosure about its new Ontario revenue arrangements.

Madison Avenue Partners, which claims to own around two million Great Canadian shares or roughly 3.5 per cent of the company, is concerned that crucial information about the casino operator’s revised agreements with the Ontario government has not been shared widely. If so, it could give Apollo an inside edge and allow the private-equity firm to lowball its offer.

“I am disturbed by the board not equipping the owners of the company with the information they need as fiduciaries to make sound and responsible decisions about their investment,” Madison managing partner Eli Samaha wrote in a letter to Great Canadian’s board Monday.

Mr. Samaha is asking the company to release any projections provided to Apollo in order to understand the impact that COVID and other changes have had on its casino operations, and to also disclose “the approximate benefit of the new [Ontario and Lottery Gaming Corp.] threshold arrangements relative to prior assumptions.”

Story continues below advertisement

On the same day that Apollo announced its takeover bid, Great Canadian also disclosed as part of its quarterly earnings that the company had entered into amended casino-operating service agreements for its Ontario gaming properties. The new contracts allow Great Canadian to operate under an interim compensation model for the duration of the pandemic and “a period of subsequent ramp-up of operations.” The interim fee model will last for 36 months.

“If this board has nothing to hide, then they should share the information the owners need to make a responsible decision with their capital,” Mr. Samaha wrote in an e-mail to The Globe and Mail.

Last month Great Canadian said it was moving forward with development projects for sites in the Greater Toronto Area, including the Pickering Casino Resort and Casino Woodbine. Toronto-based Great Canadian operates 25 casinos in Ontario, British Columbia, New Brunswick and Nova Scotia.

Apollo declined to comment. Great Canadian did not return a request for comment.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies