WPT must be included in deal
In a surprise announcement, Allied Esports Entertainment has revealed that Bally’s Corporation extended an unsolicited proposal to buy the company for $100m. In Friday’s press release, Allied Esports said that the payment would be in cash, Bally’s stock, or both, depending on what Allied Esports prefers.
Bally’s would require Allied Esports to cancel its sale of the World Poker Tour
But there is a rub. As part of the deal, Bally’s would require Allied Esports to cancel its sale of the World Poker Tour to Element Partners. Neither company has provided any further reasons or details, but presumably Bally’s, a gambling company first and foremost, wants to own the World Poker Tour brand.
Allied Esports said it will consider Bally’s offer. It added that Allied and Element will “continue to discuss potential updates to the current terms of their agreement,” which may imply the company could use this as a catalyst to boost its side of the previous arrangement.
Investors have not reacted kindly. Allied Esports shares (AESE) closed down more than 25% on Friday, plunging its market capitalization to below Bally’s offer price. It closed Thursday at $3.27 per share, which made its market cap approximately $127.5m before the announcement, based on 39 million shares outstanding.
Original sale of WPT still pending
Allied Esports and Element Partners announced their deal in mid-January. Per their agreement, Element would pay Allied Esports $78.25m for the World Poker Tour and its assets. The bulk of the payment – $68.25m – would be in cash. The rest would come from a 5% cut of WPT tournament entry fees on “Element-owned or licensed gaming platforms.” Allied would draw these payments for three years, up to the remaining $10m on Element’s purchase price.
The two companies expected the sale to close extremely quickly, in late January or early February, but clearly that did not happen.
According to Allied’s January WPT announcement, it sounded like its ultimate goal was to change courses entirely and become a special purpose acquisition company (SPAC). It had received interest, though nothing definitive, from companies looking to buy its esports business. If and when it was rid of both the World Poker Tour and esports, Allied said it would change its name and become a “publicly traded holding company focused on using its cash resources to explore opportunities in online entertainment.”
Delayed WPT final tables back on
In the meantime, the World Poker Tour is finally set to resume three tournaments in the United States that it was forced to suspend nearly a year ago as the world started to realized the seriousness of the COVID-19 pandemic. The WPT Gardens Poker Championship and WPT Borgata Winter Poker Open saw their last hand dealt in January 2020, while the WPT L.A. Poker Classic had its last pot scooped a year ago yesterday.
Those three final tables are back on the schedule. The WPT Gardens Poker Championship will be the first to see its final table get going next week, on March 10. The rest will have to wait until mid-May. Also already planned for May is the final table of the WPT Seminole Hard Rock Poker Showdown; the Main Event itself begins in April.
Tying this all back to the still pending sale of the World Poker Tour to Element, Allied Sports owns and operates the HyperX Esports Arena. Therefore, the WPT has moved the upcoming final tables to the PokerGO studio outside ARIA. They will still be filmed for television, but will not be live streamed.