Red World Poker Tour table

Looks like the sale to Element is back on

Something fascinating happened on Monday. I was proven wrong. I know, I know, impossible, but it happened. Last week, when Bally’s Corporation made a new offer to Allied Esports Entertainment for the World Poker Tour and Allied announced that it was considering it, I wrote that any heading by Allied was a “CYA move” and that the Bally’s acquisition was “going to happen.”

Well, I was not exactly accurate. It turns out the Element Partners, the company that originally offered to buy the World Poker Tour from Allied in January, improved its offer Bally’s is out. The new price for the WPT: $90.5 million cash, straight up.

Two-month tug-of-war

Now, technically, Bally’s was never actually “in.” It’s just that Allied Esports appeared to be seriously considering Bally’s offer, to the point where its Board classified it as a “Superior Proposal.” What this means, I’m not 100% sure, but it looks like it was qualifier that meant it could back out of its agreement with Element if Element didn’t come up with a better offer.

Element’s original offer to buy the World Poker Tour in January was for $78.25 million. In this deal, which was agreed upon by both parties, Element would pay Allied Esports $68.25 million in cash. The remaining $10 million would be taken from a 5% cut of WPT tournament entry fees, paid out over three years.

On March 5, Bally’s approached Allied Esports with an unsolicited offer to acquire all of Allied, including both its poker and esports businesses, for $100 million. The World Poker Tour had to be part of the deal. Allied announced the offer, but other than that, not much more was made of it. Then, just last week, Bally’s came back and sweetened the deal. The total dollar amount dropped to $90 million, but this time it was just for Allied’s poker businesses and assets. It was this offer that Allied appeared to be taking very seriously. It very much looked like Allied was going to accept it, as it beat Element’s proposal by a significant margin and still left Allied with the esports division.

Element had until 5:00pm PT on March 19 to beat Bally’s offer, which it did by just half a million bucks.

Additional contractual details

The companies made several other adjustments to its original agreement. Element’s deposit was upped from $4 million to $10 million. If Allied accepts another proposal, it must pay Element $3.4 million, an increase from $3 million.

Element’s non-performance fee was increased from $3 million to $10 million. The company is also forbidden from paying that fee to get out of the deal.

If any conditions of the sale have not been met by September 30, either party may back out. This date was pushed six months, originally March 31.

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