A big rise in Amaya Gaming’s share price late last week led to unlikely rumors that the company is considering buying PokerStars.
Preceding the spike, an analyst’s statement made last week asserted that the group was considering selling Ongame and “trading up” to another poker platform.
An article in CalvinAyre.com last Friday, prompted by the unexpected trading activity, publicized rumors of a PokerStars acquisition, which lead to flurry of reporting over the weekend.
Amaya issued a statement Monday that was seen by analysts as an attempt to quell the rumors.
“Strategic acquisitions have been and are one component of the company’s growth strategy and, as such, Amaya regularly evaluates potential acquisition opportunities,” reads the statement.
“From time to time, this process leads to discussions with potential acquisition targets. There can be no assurance that any such discussions will ultimately lead to a transaction. As a general policy, Amaya does not publicly comment on potential acquisitions unless and until a binding legal agreement has been signed,” it continues.
“The company intends to make no further comment or release regarding current market rumours unless and until such comment is warranted.”
Amaya’s share price has risen by over 50% since mid-May when it released its first quarter results, thanks to a big increase in profit margins.
Neil Linsdell, analyst with Industrial Alliance Securities, wrote on May 20 that he expects Amaya to look to “‘trade up’ to a larger poker platform” and sell the recently acquired Ongame poker network.
Any large network looks like an expensive proposition when compared to Amaya’s market capitalization. After the recent stock price boom, the Canadian company has a value of just under CAD$1bn. Even so, an attempt to buy iPoker from Playtech or partypoker from bwin.party—let alone acquire PokerStars, online poker’s giant—would require an unusual level of corporate finance.