After offering to buy Allied Esports for $100m earlier this month, Bally’s Corporation has revised its proposal, now offering $90m for just the World Poker Tour. [Image: Flickr.com]
Your move, Element Partners
Allied Esports has announced that a new, $90m proposal from Bally’s Corporation is a strong one, meaning that it will likely end its agreement to sell Element Partners the World Poker Tour (WPT). Though Allied has said that this does not officially mean that it is selling the WPT to Bally’s, the writing is on the wall and it is almost certain to happen.
the company’s Board of Directors classified Bally’s offer as a “Superior Proposal”
In its Tuesday press release, Allied said that the company’s Board of Directors classified Bally’s offer as a “Superior Proposal,” a term used in Allied’s January deal with Element. Though Allied did not explain what this means, one could surmise that the agreement included an out for Allied if such a “Superior Proposal” found its way to the company’s door.
Bally’s has offered Allied $90m cash for Allied’s subsidiary Club Services, which owns its poker-related businesses, including the World Poker Tour. Element is now on the clock, as it has until 5pm PT on March 19 to come back to Allied with a better offer or Allied will terminate their previous agreement.
Bally’s offer simpler, more lucrative
That previous agreement, announced on January 19, was for Element Partners to buy the World Poker Tour and the rest of Allied’s poker-related business and assets for $78.25m. All but $10m of that total would be in cash. That remaining $10m would come from a 5% draw on WPT tournament entry fees.
In that same announcement, Allied indicated that it had received interest in its esports business, as well. If and when it got rid of both its poker and esports businesses, it said it would morph into a “publicly traded holding company focused on using its cash resources to explore opportunities in online entertainment.”
But on March 5, Allied Esports announced that Bally’s had come to it with an unsolicited offer to buy the entire company for $100m. The big condition was that the World Poker Tour had to be included. Since then, the offer has been revised down to $90m, but it is now only for the WPT, not the entire company. Thus, the $90m proposed price is better than Element’s $78.25m, which, because of the tournament fee portion, would take three years to fulfill.
Shares of Allied Esports (AESE) closed down more than 25% on the day Bally’s first offer was announced, taking the company’s market cap below the $100m offer price. It is down about 5% in late afternoon trading today, though some of that may be from an overall market decline.
WPT ramping back up
It was a year ago that the World Poker Tour, along with the rest of the live poker world, came to a screeching halt as the COVID-19 pandemic picked up steam. Some tour stops were only “postponed,” as the hope was that things could get back to normal in a few months, but that didn’t happen. To make the best of a bad situation, the WPT created online events.
The World Poker Tour has finally resumed live operations, starting with the WPT Lucky Hearts Poker Open in Hollywood, Florida in January. Among the affected tournaments last year were three – the WPT Gardens Poker Championship, the WPT Borgata Winter Poker Open, and the WPT L.A. Poker Classic – that were part of the WPT’s new “delayed” final table structure, introduced in 2019. Each of those was supposed to hold its final table at the HyperX Esports Arena at the Luxor in Las Vegas (owned by Allied Esports), but couldn’t because of the pandemic.
The three final tables were recently rescheduled. The first, the WPT Gardens Poker Championship, finished up over the weekend at PokerGO’s studio, with Markus Gonsalves taking the title. The other two are scheduled for May. The rescheduling also presented a unique scenario: Qing Liu won the WPT Venetian Main Event on March 9 and had made the final table of WPT Gardens, held the very next day, giving him the chance to be the first to win WPT titles on consecutive days. He bowed out in sixth place.