Amaya’s shares were up about 27 percent at C$19.15 in morning trading in Toronto, but were still below Baazov’s proposed offer of about C$21 per share.
The company’s stock has more than halved in value in the past 12 months due to scrutiny of daily fantasy sports in the United States, delay in the launch of a sports-betting platform and legal worries.
However, the company could receive a major revenue boost if U.S. states such as California legalize online gambling over the next couple of years, Global Maxfin Capital analyst Manish Grigo said.
The proposal values Amaya at C$4.39 billion ($3.13 billion) on a fully diluted share basis as of Sept. 30.
Based on Amaya’s basic share count, the proposed offer values the company at about C$2.8 billion, representing a premium of about 40 percent to the stock’s Friday close on the Toronto Stock Exchange.
Grigo said Baazov could recover his investment over a period of time as a big portion of the revenue in the online gaming industry falls straight to the bottom line.
It was not immediately clear how Baazov, who currently owns about 18.6 percent of Amaya’s outstanding common shares, would be financing the deal.
Baazov was among the executives who were investigated in June by Quebec’s securities regulator for trading in Amaya’s stock ahead of the company’s $4.9 billion takeover of PokerStars owner Rational Group in 2014.
Blackstone Group LP's BX.N credit division, GSO Capital Partners, was one of the main investors in the Rational deal.
Montreal-based Amaya warned in November that its 2015 profit would be hurt by a strong U.S. dollar and the delay in the launch of its sportsbook.
The profit warning followed the company’s decision to limit its DFS brand StarsDraft from operating real money games and tournaments in most U.S. states.
Federal and state authorities have been investigating whether DFS gaming is legal under gambling laws.
In December, a Kentucky court ordered the company to pay $870 million in penalties to cover alleged losses by the state’s residents who played real-money poker on PokerStars’ website between 2006 and 2011.
Amaya’s U.S.-listed shares were also up about 27 percent at $13.43 on Nasdaq.
Reporting by Amrutha Gayathri in Bengaluru; Editing by Anil D’Silva
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