Update March 25, 2021: In the latest turn of events, Allied Esports has announced its board of directors’ conclusion that Bally’s offer to acquire its poker-related business is a “Superior Proposal” to that made by Element Partners. Bally’s acquisition bid currently stands at $105 million in cash once the deal is concluded.
Allied has informed Element that it intends to reject their stock purchase agreement unless this is revised before March 29.
Other terms got stricter
Allied Esports Entertainment has reworked its agreement with Element Partners and is now once again prepared to sell Element the World Poker Tour. On Monday, Allied announced that the new deal is for Element to buy Allied’s “poker-related business and assets,” which includes the World Poker Tour, for $90.5m.
beat Bally’s recent unsolicited offer for the World Poker Tour by half a million dollars
The updated terms allow Element to beat Bally’s recent unsolicited offer for the World Poker Tour by half a million dollars. In addition to the increased purchase price, Element’s initial deposit has jumped from $4m to $10m.
Allied Esports must pay Element a termination fee of $3.45m if it accepts a competing offer, up from $3m. On the flip side, Element’s non-performance fee has ballooned from $3m to $10m and it is not permitted to simply pay the fee to get out of the deal before the “outside date,” which has moved from March 31 to September 30. The two companies expect the deal to close in late April.
Beat Bally’s bid by a hair
This announcement follows a tug-of-war for the World Poker Tour that dates back to January. Allied and Element originally announced an agreement for the WPT on January 19; Element Partners was to pay $78.25m for Allied’s poker business and assets. Of that amount $68.25m was going to be cash, while the other $10m would be paid out over three years, taken from a 5% draw on World Poker Tour tournament fees.
Then, on March 5, Allied Esports announced that Bally’s Corporation had come in with an unsolicited offer to buy the entire company for $100m, specifically conditional on the World Poker Tour being part of the sale. This, of course, meant that Allied would have to end the deal with Element. At the time, Allied simply said it was taking the bid under consideration.
Last Tuesday, March 16, Allied provided another update, announcing that Bally’s had revised its proposal, offering $90m for just the poker business, including the WPT. It sounded like Allied was close to accepting this one, as it indicated that the Board of Directors classified it as a “Superior Proposal” to Element’s, which appeared to a be a qualifier for Allied to back out of its agreement with Element.
Element Partners had until 5pm PT on March 19 to beat Bally’s proposal, which it has done.
WPT has jumped around
Regardless of which company takes control of the World Poker, it would be the fifth home for the Tour. And though it is a massive name in poker entertainment, it has never been considered all that valuable. Steve Lipscomb founded the WPT in 2002 as part of WPT Enterprises. PartyGaming acquired the World Poker Tour for just $12.3m in November 2009.
In 2011, PartyGaming merged with bwin to form bwin.Party Digital Entertainment. In 2014, the WPT licensed its brand to OurGame to gain exposure in Asia. That exposure must have worked, as OurGame bought the World Poker Tour from bwin.party in June 2015 for $35m.
OurGame turned around three and a half years later, selling both the World Poker Tour and Allied Esports Entertainment to Black Ridge Acquisition Group, a SPAC, for $150m. Controlled by Tour co-founder Lyle Berman, Black Ridge renamed itself to reflect Allied’s name.
