Wednesday, June 24, 2009 | 4:53 p.m.
Global Cash Access Holdings Inc. of Las Vegas said Wednesday it further distanced itself from two of the company's founders -- men sharply criticized by Arizona regulators who want to stop Global Cash from doing business in that state.
Global Cash said it told Karim Maskatiya it plans to buy 6,652,475 shares of its common stock held by him.
The firm said this is allowed in the company’s certificate of incorporation, which says it can redeem shares of its common stock that are owned by stockholders who are found to be unsuitable stockholders for gaming regulatory purposes.
The redemption will be completed on or about Sept. 22 at a price per share equal to the average closing price of the company’s stock on the New York Stock Exchange during the 30 trading days prior to the date of notice, Global Cash said. That price is about $6.98, the company said. The stock closed Wednesday at $7.33.
"The redemption notice was sent in an attempt to avoid the company’s loss of its regulatory approval to provide its products and services at Native American gaming establishments within Arizona," Global Cash said.
The company also said it repurchased 5,785,602 shares of its common stock from another founder, Robert Cucinotta, at a per share price of $6.25, making the purchase worth about $36.1 million.
The Arizona Department of Gaming recommended Global Cash be barred from doing business in the state because of incidents years ago when, the agency said, Global Cash defrauded banks by miscoding cash advance transactions; and because of a pattern of misleading regulators and of failing to be forthcoming with them.
Global Cash, which provides credit and cash advance services at casinos around the world, said Arizona generates about 5 percent of its revenue. The company plans to appeal the Arizona recommendation and insists it's worthy to be a vendor to Indian casinos there. It serves about 20 such casinos in Arizona.