U.S. equity firm vows to expand casino company at centre of money-laundering inquiry
Apollo Global Management has made $3.3B bid for Great Canadian Gaming Corporation
The private U.S. equity firm that's bid to take over the Great Canadian Gaming Corporation is promising to expand the company and hire more Canadian staff at its casinos and raceways.
Apollo Global Management Inc. has agreed to pay $39 per share in a $3.3-billion deal to acquire the gaming company, which operates 25 facilities across Canada and has featured prominently in an ongoing inquiry into money laundering in British Columbia.
Great Canadian Gaming has been hit hard by the pandemic, with its entertainment and hospitality facilities in B.C., Ontario, New Brunswick and Nova Scotia forced to close.
It applied for government assistance to offset losses and, up to the end of June had collected $5.9 million in relief funds, according to a management analysis by the company.
Apollo declined an interview but said in a statement it plans to increase staff numbers and expand the company's holdings.
"We seek to return to pre-COVID employment levels as soon as possible and anticipate that Great Canadian's employee headcount will increase under our ownership, with future expected growth," an Apollo spokesperson told CBC by email on Wednesday.
Rod Baker, the current CEO of Great Canadian Gaming, described the deal as very good for shareholders, and said the board of directors "unanimously concluded" that it's the best course of action for the company.
But several minority shareholders have said they will reject the Apollo deal when it goes to a vote next month, saying the deal undervalues the worth of the company.
The company's stock soared more than 35 per cent when the Toronto Stock Exchange opened after the company's third-quarter financial report was issued Wednesday.
Cullen Commission inquiry
Meanwhile, Great Canadian Gaming is on centre stage at the ongoing Cullen Commission inquiry into money laundering in the Vancouver area. The company owns several gambling sites in B.C. and the inquiry has often focused on activities at its River Rock Casino in Richmond, about 15 km south of Vancouver.
The inquiry, created to determine whether corruption allowed money laundering to take root in B.C. casinos, has heard that transactions of $100,000 were common in Vancouver-area casinos a decade ago.
It has also heard testimony that when B.C. Lottery Corporation investigators tried to bar high-rolling VIPs from the River Rock whom they suspected of using loan sharks, casino managers and BCLC executives failed to act.
Mark Skwarok, the lawyer representing Great Canadian Gaming, said the company did not put profit before people.
Should shareholders vote for the Apollo deal, the transaction is expected to be finalized by the second quarter of 2021. The company's headquarters would remain in Toronto and be led by a Canadian management team.
Apollo is a global investment management company with offices in cities around the world including New York, Frankfurt and Hong Kong, with assets worth almost $433 billion.
The Canadian Revenue Agency said it could not comment on the $5.9 million in assistance paid to the gaming company because it does not discuss individual cases for privacy reasons.
A media relations person said in an email to CBC News that in general, the Canada emergency wage subsidy "only applies to individuals who are employed in Canada." The CRA ensures compliance and through audits can claw back wage subsidies if an overpayment is detected, the agency said.