(Changes source, adds details)
June 12 Canada's Amaya Gaming Group Inc
on Thursday said it will buy for $4.9 billion Rational Group,
which owns and operates the world's biggest online poker company
The transaction will be financed with a combination of cash
on hand, new credit facilities and equity financing, the company
said in a statement.
The deal is backed by Blackstone Group LP's credit
division, GSO Capital Partners, which will buy more than $600
million in convertible preferred shares and other securities.
Deutsche Bank, Barclays and Macquarie Capital will provide $2.9
billion in credit facilities and other financing.
Rational Group, owned by Oldford Group, operates gaming and
related businesses including PokerStars and Full Tilt Poker,
which are collectively the world's most popular and profitable
online poker brands with more than 85 million registered players
on desktop and mobile devices.
Amaya said it expects the transaction will "expedite the
entry of PokerStars and Full Tilt Poker into regulated markets
in which Amaya already holds a footprint, particularly the USA".
Online gambling was effectively outlawed in the United
States until December 2011, when the Justice Department backed a
court decision that said a 1961 law banning interstate sports
betting did not apply to other forms of gambling.
Nevada, New Jersey and Delaware now offer some form of
internet gambling, and eight other states considered legislation
In 2011, federal prosecutors in Manhattan launched a massive
crackdown against online poker in the United States.
PokerStars paid $731 million in July 2012 to settle a money
laundering lawsuit filed by the U.S. Department of Justice that
contended the companies used fraudulent means to circumvent
federal law and deceive banks into processing payments for them.
Amaya said the deal, expected to close by Sept. 30, will be
immediately accretive to its earnings.
The company said it will retain Rational Group's management
team and PokerStars and Full Tilt Poker's services will be
unaffected by the deal.
However, Mark Scheinberg, founder and CEO of Oldford Group
will resign from all positions with Oldford Group and its
subsidiaries on completion of the deal.
(Reporting By Tanvi Mehta, Narottam Medhora and Ankush Sharma
in Bangalore; Editing by Savio D'Souza and Miral Fahmy)