The Great Canadian Gaming Corporation, which owns the Shorelines Casino Thousand Islands, has agreed to sell its holdings to a global investment fund.
Apollo Global Management has offered $3.3 billion for Great Canadian’s 25 properties – or $39 a share – and the gaming company’s board of directors has unanimously recommended that its shareholders take the deal.
Company shareholders will vote on the offer at a meeting in December. The offer is about $10 a share more than the Great Canadian market value before the offer was announced and company CEO Rod Baker proclaimed in a statement that the deal is a “great opportunity for our shareholders, while continuing to support the success of the business longer term.”
In the joint statement announcing the offer, Apollo said it is committed to “maintaining the company’s current operational footprint” and even expanding in the future.
“Apollo intends to help drive additional, incremental growth through initiatives such as expansion of non-gaming facilities, expanded loyalty and marketing programs and gaming improvements that leverage the scale of the firm’s platform,” it said in the statement.
“Apollo recognizes Great Canadian’s strong track record of corporate citizenship and community involvement and will continue this legacy.”
The Shorelines Casino Thousand Islands, located just outside of Gananoque in the Township of Leeds and the Thousand Islands (TLTI), is one of 25 properties owned by Great Canadian, including the casino in Belleville.
As with all casinos in Ontario, indeed across Canada, the Gan casino has been hard hit by COVID-19. The casino closed in March because of the pandemic and only reopened in September, albeit with a maximum of 50 customers.
The town and township split a portion of the slot-machine revenues from the casino under a formula set by the Ontario Lottery and Gaming Corporation (OLG). In a good year, the municipalities can get $1.6 million apiece.
This year, of course, has not been a good one. The municipalities got a first-quarter payment in March covering the winter months, which tend to be slower, but since then the casino cash has all but dried up.
Melanie Kirkby, Gananoque treasurer, said the first quarter payment was $258,000 and that the town had budgeted to receive $1.5 million from the casino this year.
Tony Bitonti, director of external communications for the OLG, said the money will continue to flow to Gananoque and TLTI regardless of the ownership.
“The municipal contribution agreement is in fact between the OLG and the host communities, not the service provider and the community,” Bitonti said.
Mayor Corinna Smith-Gatcke of TLTI said she is pleased that Apollo has experience in the gaming industry, adding the sale offer had just been announced so she hadn’t heard anything from the company about its plans.
“I hope that the sale will be a good thing for everybody involved, all the employees and the town and the township and that we’ll see future investment,” she said.
Mayor Ted Lojko of Gananoque said the town has had a good relationship with Great Canadian and he is certain that will continue with the new owners.
He said it is unfortunate that the Ontario- and B.C.-based Great Canadian is being bought out by an American company but he speculated the sale was because of the economic realities of COVID.
Apollo, a global investment fund manager with offices around the world, said Great Canadian will remain headquartered in Toronto, led by a Canadian management team and with Canadian board members.
After the sale closes, Apollo said it expects that Canadian institutions might co-invest in Great Canadian to become equity owners along with Apollo.
In the statement, Alex van Hoek, partner at Apollo, said his company sees opportunities to work with the Great Canadian team.
“With an industry-leading portfolio of assets and established presence in the best geographic markets across Canada, we are excited to help bring an enhanced experience to more guests across Canada,” van Hoek said.
He added that Apollo recognizes the challenges of COVID and his company is committed to working with health authorities to allow it to reopen its properties as soon as it is safe.
“We’re excited for the company to welcome Great Canadian team members back to work, and we look forward to a time when employment and operations return to pre-COVID levels,” he said.