Investor Tang Hao enters into agreement with The Stars Group
Throughout 2017 a little known Hong Kong based investor, Tang Hao was stealthily purchasing a large number of shares in PokerStars parent company Amaya Gaming (which became The Stars Group in August last year), eventually capturing 17.9% of the company’s common shares.
A press release from The Stars Group just a few weeks ago announced they had entered into an agreement with Hao – who is now the company’s second largest shareholder.
The agreement, which was announced on 10th January this year between The Stars Group and Mr. Tang Hao and his affiliated entity Discovery Key Investments Limited. As part of that agreement Hao was able to appoint an observer member to the board of directors with a view to becoming a full director once both the observer (a Mr Melvin Yanmin Zhang) and Tang Hao have both been approved for certain necessary licenses.
With 26,455,200 of The Stars Groups’s common shares, Discovery Key Investments are now the second largest shareholder behind Caledonia Investments plc who hold 29,353,153 shares (source: yahoo). However, as Discovery Key Investments is wholly owned by Tang Hao, the 26.5m shares undoubtedly make him single biggest individual shareholder.
Interestingly, until this time last year disgraced former CEO David Baazov owned 17% of the shares, but he has since been selling off shares as fast as Tang Hao could buy them.
Even more interestingly, a Mr Hao Tang is a former CEO of Goldenway Capital, one of the two Hong Kong firms who backed David Baazov’s failed attempt to acquire Amaya late in 2016. Baazov’s attempted buyout fell short of course, since when The Stars Group’s major financiers effectively blocked Baazov from attempting anymore buyouts by renegotiating the terms of their deal with Stars Group, penalising them heavily if “a certain current shareholder” were to either directly or indirectly acquire control of the company.
While Goldenway Capital were unable to establish themselves as major players in the The Stars Group set-up due to their association with Baazov, it would appear that Tang Hao was very taken with the investment opportunity and has now got a seat at table of the board of directors on his own dime.
Although unlikely, January’s statement by The Stars Group concerning their agreement with Tang Hao doesn’t actually preclude him from making a takeover bid of his own, or make any mention of the “poison pill” promised if David Baazov were to stage a takeover big stating;
“Mr. Tang will not acquire greater than 20% of the outstanding common shares of The Stars Group prior to the 2020 annual general meeting of shareholders other than by way of a negotiated transaction approved by The Stars Group board of directors or by way of formal takeover bid for all of the outstanding common shares of The Stars Group.”