Apollo Gets a Nod from the Court in its Bid for Great Canadian Casino

In a significant move that reshaped the Canadian gaming landscape, Wall Street private equity giant Apollo Global Management successfully acquired Great Canadian Gaming Corporation. This landmark deal, which concluded in 2021, marked a substantial investment in Canada's land-based casino sector by a major global financial player.

The acquisition process was a complex journey, navigating shareholder concerns and regulatory approvals, ultimately leading to one of the largest transactions in the Canadian gaming industry in recent years. It underscored the growing interest of private equity firms in the resilient and evolving gambling market.

The Path to Acquisition: A Detailed Look

Apollo Global Management first announced its intention to acquire Great Canadian Gaming in late 2020, initially proposing an offer of C$39 per share. Great Canadian Gaming, a prominent operator with a vast portfolio of casino and entertainment properties across Canada, quickly became a focal point for investors.

However, the initial bid faced considerable resistance from some of Great Canadian Gaming's major shareholders. They argued that the offer, valuing the company at approximately C$3.3 billion, significantly undervalued the company, especially given its strong market position and potential for recovery post-pandemic. Great Canadian Gaming operates numerous key venues, particularly in the Greater Toronto Area, making it a highly attractive asset.

Responding to shareholder pressure, Apollo revised its offer in early 2021, increasing the bid by 16% to C$45 per share. This revised proposal garnered the necessary support, with 79% of Great Canadian Gaming shareholders voting in favour of the deal during a special meeting. Following shareholder approval, the British Columbia Supreme Court provided its consent, clearing the final major hurdle for the acquisition.

Great Canadian Gaming Under Apollo's Ownership

With the acquisition officially completed in the second quarter of 2021, Great Canadian Gaming Corporation was delisted from the Toronto Stock Exchange, transitioning into a privately held entity under Apollo's control. This move allowed Apollo to implement its long-term strategic vision for the company, focusing on operational enhancements, expansion opportunities, and leveraging its extensive experience in the leisure and entertainment sectors.

Founded in 1982, Great Canadian Gaming boasts an impressive portfolio of 26 gaming properties spread across Ontario, British Columbia, Nova Scotia, and New Brunswick. These properties include casinos, racetracks, and entertainment venues, making it a dominant force in the Canadian market. Despite the challenges posed by the global pandemic at the time of the acquisition, Apollo expressed strong optimism about the future growth potential of Great Canadian Gaming, anticipating a robust recovery and sustained success.

Apollo's Broader Strategy in the Gaming Sector

The acquisition of Great Canadian Gaming was not an isolated event but rather a significant part of Apollo Global Management's broader strategic push into the global gambling industry. The private equity firm has demonstrated a clear appetite for substantial investments in the sector, recognizing its resilience and growth prospects.

Prior to and concurrent with the Great Canadian Gaming deal, Apollo made other notable moves. For instance, in late 2020, Apollo invested $500 million in SAZKA Group, a Czech lottery company, to bolster its bid for the highly coveted UK National Lottery license. Additionally, an Apollo-backed operator, Gamenet, announced plans to acquire an Italian B2C business for €950 million, further diversifying Apollo's European gaming footprint.

Apollo also actively participated in the bidding for William Hill, a major UK bookmaker, though Caesars Entertainment, Inc. ultimately secured that acquisition. However, with Caesars later indicating plans to divest William Hill's non-US operations, Apollo remained poised to re-enter the bidding, underscoring its persistent interest in expanding its global gaming portfolio. These strategic maneuvers highlight Apollo's commitment to becoming a major player across various segments of the international gambling market, with the Great Canadian Gaming acquisition serving as a cornerstone of its North American strategy.