Great Canadian Gaming Corp.'s agreement to be acquired for $3.3 billion by a U.S. private equity firm was quickly rejected Wednesday by some of the casino operator's minority shareholders.
Apollo Global Management Inc. has agreed to pay $39 per share for the company — a price that Great Canadian's CEO says is very good for shareholders.
But Bloombergsen Investment Partners, a Toronto-based investment firm that owns about 14 per cent of Great Canadian's equity, told an investor call that the Apollo deal doesn't come close to the true long-term value of the stock.
Representatives of fellow minority shareholders Madison Avenue Partners and Breach Inlet Capital investors said they would also vote against the Apollo deal, which is subject to various approvals from shareholders and regulators.
Among other things, the investors said Great Canadian should have looked for alternatives to the Apollo offer, which was announced late Tuesday ahead of the company's scheduled third-quarter financial report issued Wednesday.
Great Canadian Gaming stock soared more than 35 per cent when the Toronto Stock Exchanged opened, gaining $10.11 to trade at $39.02 in early trading.
The company runs 25 gaming, entertainment and hospitality facilities in Ontario, British Columbia, New Brunswick and Nova Scotia.
Great Canadian says its board has unanimously recommended that shareholders vote in favour of the transaction at a meeting that is expected to be held in December.
Once the deal closes, Great Canadian is expected to remain headquartered in Toronto, led by a Canadian management team.