The logo of gaming company Amaya Inc is seen at its head office in Montreal June 22, 2015.© Christinne Muschi / Reuters
A cloak of secrecy surrounded Amaya Inc. on Tuesday as top executives met with shareholders behind closed doors and refused to discuss a securities investigation or potential takeover bids.
The company's board of directors excluded the media and non-shareholders from their annual general meeting, the first since former chairman and CEO David Baazov was charged following an investigation into allegations of insider trading.
Shareholders leaving the meeting said no questions were asked after they were informed at the outset there would be no discussion of Mr. Baazov's legal problems, the investigation by the province's securities regulator or the possibility of a takeover.
"We're treating it the way we feel is appropriate for shareholders this year," Amaya spokesman Eric Hollreiser said outside the meeting. Interim CEO Rafi Ashkenaz declined to speak with reporters.
New York institutional investor Jason Ader of Spring Owl Asset Management said Amaya has huge potential but it has its work cut out trying to persuade its 100 million customers who play online poker to gamble on other web-based casino and sports betting games.
"It's an interesting time for this company," he said. "It's at a crossroads. Great assets. Controversy. Lot of value."
Amaya, which runs the wildly popular game PokerStars, said several potential buyers, including a group headed by Mr. Baazov, have entered into confidentiality agreements with the company and are conducting due diligence for a possible takeover.
In a news release, Amaya said one more group recently entered the process. It said a special board committee continues to review strategic alternatives and is also tasked with investigating allegations against Mr. Baazov.
Mr. Ader said he believes it will be difficult for Mr. Baazov to get institutional financing for an offer because of the charges and said he doesn't agree with Amaya's decision to pay Mr. Baazov's legal bills.
Mr. Baazov has pleaded not guilty to five charges, including influencing or attempting to influence the market price of Amaya shares and with communicating privileged information. The case against Mr. Baazov, two other people and three companies, is due in a Quebec court Sept. 7.
Mr. Baazov, who took an indefinite paid leave of absence in March and did not seek re-election to the company's board of directors, left the meeting Tuesday saying he attended as a shareholder in support of management.
"I don't want to take any other spotlight," he said.
The 35-year-old businessman has more than 24.5 million Amaya shares or nearly 17 per cent of all stock in circulation, making him the company's largest shareholder.
Two new directors were selected to join Amaya's board with the departure of Mr. Baazov and chief financial officer Daniel Sebag.