Allied Esports Entertainment Inc. (Nasdaq: AESE) based in Irvine said last Thursday that Bally’s Corp.’s latest offer of $105 million for its World Poker Tour unit and assets is “superior” to a pending agreement with rival Element Partners LLC.
Allied Esports said it was giving Element Partners until 5 p.m. on March 29 to negotiate an amended agreement with Allied to stay in the running.
Allied had previously entered into an agreement to sell the WPT to Element for an upwardly revised amount of $90.5 million, subject to conditions.
The bidding pits casino-owning giant Bally’s of Rhode Island (NYSE: BALY) against lesser-known known Element Partners.
According to a filing with the SEC, Element Partners “is owned by an investment fund,” while Business Journal research indicates it has ties to several professional poker players and a Foster City-based tech firm.
It’s the latest chapter in a story that began in January, and has led to Bally’s and Element jockeying to acquire the WPT.
At press time it appeared Bally’s had the winning hand, though a last-minute surprise is always possible.
Shares in Allied Esports dropped 11% last Thursday to $2.93 apiece for a market cap of $114.7 million following the announcement about Bally’s, though they were still up about 58% since the initial word of the proposed sale agreement for WPT in January.
Bally’s has a market cap of about $2.2 billion.
Allied Esports isn’t commenting beyond the official statements, but WPT Chief Executive and President Adam Pliska told the Business Journal “we feel that the interest in WPT is a reflection of the enduring nature and value of the brand and the work of its team.”
The World Poker Tour’s television show is seen worldwide by more than 150 million people annually, and its global events have awarded more than $1 billion in prize money over the years. WPT has broadcast globally in more than 150 countries and territories, and is currently producing its 18th season, which airs on Fox Sports Regional Networks in the U.S.
WPT also participates in strategic brand license, partnership, and sponsorship opportunities.
Allied Esports had revenue of $5.9 million in the three-month period ending Sept. 30, down 2.5% from the same quarter a year earlier.
The company operates venues and live events for video gaming enthusiasts. Less than two years ago it went public via a reverse merger with a special purpose acquisition company less than two years ago.
Even if the WPT sale goes through, it still leaves open the question of the other part of the Allied Esports business—the esports segment itself. Allied said a sale of the esports business was possible, which could eventually lead to “real money gaming and other gaming sectors.”
Real money gaming refers to quasi-gambling online sites where real money is wagered.
While video gaming and esports have enjoyed a boom during the pandemic, the parent company of Blizzard Entertainment in Irvine has signaled a possible shift away from in-person events.
Activision Blizzard is eliminating jobs for “dozens of people” across various departments, including employees who handled esports programming and other live events, Bloomberg News reported earlier this month.
The news agency said the cuts signal that Activision Blizzard (Nasdaq: ATVI) plans a broader shift away from in-person events after a year of coronavirus lockdowns.