Quebec’s Securities Regulator has launched an investigation into the acquisition of The Rational Group, a parent company of PokerStars. As a result, stocks have plummeted.
Amaya Inc has suffered an 18 percent drop in shares after it announced a launch of an investigation into their latest acquisition. Quebec’s Securities Regulator will lead the inquiry into the Montreal-based online group.
In Canadian gambling news, there was some speculation about Amaya’s possible acquisition of the Rational-Oldford Group, the parent company of PokerStars. This and the following announcement of the deal made by Amaya brought it’s shares upward to a high of $39.25.
After Amaya confirmed the investigation into the $4.9 Billion deal, stock plummeted to $25 by mid-morning. The 29 percent drop later minimized as shares were able to close at $28.64
Amaya sent the following statement in the early hours of December 12. “To the [Amaya’s] knowledge, this does not involve any allegations of wrongdoing by [Amaya]. Amaya will continue to cooperate, if and as requested, consistent with our practive to always cooperate with regulatory authorities.”
Unless the investigation is directly targeting the company or it’s management, the continual progress of Amaya shouldn’t be heavily effected, predicts industry experts.
Other Companies also under Investigation
Members of the Royal Canadian Mounted Police, who visited Amaya offices along with Quebec’s Securities Regulator, said they were only providing routine security and their presence wasn’t because of a raid. Under Canadian gambling laws, Securities Regulator wouldn’t comment on the investigation.
Investment Banker Cannacord is also under investigation. A spokesman for Cannacord, who along with Deutsche Bank Securities advised the deal, said that the company is fully cooperation with authorities and the Securities Regulator had only requested information.
Manulife Financial was also visited as part of another ongoing investigation. A spokesman for Manulife Financial says they’re also cooperating fully with authorities.
Although Intertain Group’s stock took a 26 percent drop to $10.70 on the exchange on Friday, any similarities to the regulator’s activity of Amaya can’t be seen at this time.