The sale of the World Poker Tour may be approaching its final few hands.
Irvine-based Allied Esports Entertainment Inc. (Nasdaq: AESE) is preparing for a meeting to “consider and approve” the sale of the World Poker Tour (WPT) division to Element Partners LLC. Initially planned for June 28, the company expects a procedural matter in Hong Kong to delay the final steps a bit beyond that date, officials tell the Business Journal.
A third-quarter closing appears likely.
The planned acquisition follows a back-and-forth bidding war between Element Partners and casino giant Bally’s Corp. that took place over the past six months, with the lesser-known entity coming out on top.
Element Partners in late 2020 initially offered $78.3 million for Allied Esports’ most valuable asset, and was later countered by several offers from Bally’s (NYSE: BALY), which counts a $2.5 billion market valuation.
The final price approved by Allied marks a major bump in price for the WPT, whose television show is seen worldwide by more than 150 million people annually, and whose global events have awarded more than $1 billion in prize money over the years.
In 2015, WPT was purchased for $35 million by China-backed Ourgame International Holdings Ltd., and then in 2019 it was acquired by blank-check firm Black Ridge Acquisition Corp. as part of a larger deal that led to the public listing of Allied Esports via a reverse merger.
The 2019 deal valued WPT at around $50 million.
Allied, whose other business involves hosting esports tournaments and running dedicated venues for gamers to play and compete against one another, is now valued at about $85 million. Its stock, which traded around $10 at the time of the reverse merger with SPAC Black Ridge, now stands around $2.20.
Quiet Bettor
Little is known about Element, which hasn’t commented on its plans for the WPT post-sale.
According to a filing with the SEC, Element Partners “is owned by an investment fund.”
Business Journal research indicates it has ties to several professional poker players, including one who was recently cited as an exec at gambling site Poker King Live, as well as a Foster City-based tech firm that’s involved in the gaming industry.
Adam Pliska, the longtime president and chief executive of World Poker Tour, is expected to join Element at the completion of the sale. He told the Business Journal in January that the poker company is expected to remain local post-sale.
The WPT resumed in-person events earlier this month. Last year it pivoted to online events, and reported a modest amount of profitability in 2020, $725,508, during the pandemic as web viewership increased.
“As we emerge from restrictions throughout North America, we have bolstered the momentum from last season’s historic numbers and are eager to meet the great demand for WPT events leading up to our 20-year anniversary in 2022,” Pliska said earlier this month.
The WPT is televised on Bally Sports in the U.S.; the casino operator that made the bid for WPT owns the network’s naming rights.
Multiple Meetings
Some drama over the WPT sale appears to be unfolding right to the end.
Allied Esports said in a June 11 notification that Ourgame International, its main shareholder and publicly traded in Hong Kong, would need its own shareholder meeting to be able to vote its shares if they are required to get enough votes to approve the WPT deal. The Ourgame meeting is scheduled to take place on June 30.
The original Allied Esports meeting planned for June 28 will have been adjourned and will be resumed after the 30th to finally sign off on the WPT deal.
The esports company may be in for even more changes beyond saying goodbye to the WPT.
Allied has said it would “explore opportunities in online entertainment, including but not limited to, real money gaming and other gaming sectors,” using the proceeds from the sale to fund those opportunities.
Real money gaming refers to quasi-gambling online sites where real money is wagered.
