Shares in Great Canadian Gaming Corp. (GCGC) soared on news that it won a bid to run three gambling facilities in Ontario.
On Tuesday, the Ontario Lottery and Gaming Corporation announced that it has selected Ontario Gaming GTA LP (OGGLP), a joint venture between GCGC and private equity firm Brookfield Business Partners LP, to run three casinos in the Toronto area.
The announcement caused Great Canadian shares to spike 18 percent to finish the day at a record C$30—the biggest one-day gain since 2001. Stock in Brookfield was also up 7.8 percent, closing the day at C$38.05.
Under the deal, OGGLP will have the exclusive right to operate OLG’s assets for a minimum of 22 years, including more than 4,000 slot machines, 60 table games and more than 2,200 staff, according to a statement released by the two companies.
The Greater Toronto Area is OLG’s largest concession, and includes the Slots at Woodbine racetrack, Ajax Downs and the Great Blue Heron Casino in Port Perry. OLG said in its procurement prop to 400 gaming tables for the Woodbine facility in east Toronto.
Awarding the concession to the GCGC-led joint venture is part of Ontario’s move to modernize gambling in the province. The group is expected to invest about C$1 billion (US$788 million) during the concession period to expand Ontario’s gaming offerings, while also adding conference, hotel and entertainment facilities, said Brookfield Business Partners CEO Cyrus Madon.
Brookfield and Great Canadian each holds a 49 percent interest in the joint venture, while Canadian private equity firm Clairvest Group, which acquired Indian rummy portal Ace2Three early this year, will hold a 2 percent interest. Great Canadian will operate the gaming facilities within the Toronto area in behalf of the partnership.
The acquisition of OLG’s assets is expected to be completed by early 2018, subject to regulatory approvals and other customary conditions.