The long-awaited second bidder in the sale of World Poker Tour Enterprises (WPTE) has finally been revealed. Peerless Media Limited, a subsidiary of Party Gaming, will purchase the rights to the popular poker tour for $12.3 million plus 5% of future gaming revenues.
PartyPoker, the online poker arm of PartyGaming, does not accept customers from the United States. In a form filed to the Securities and Exchange Commission (SEC) after trading had closed on Monday in New York City, WPTE officials explained, “Buyer will pay the Company $12.3 million less the amount of certain obligations of PartyGaming or its affiliates accruing or paid to the Company from July 10, 2009 through the close of the Transaction… $1 million of such amount shall be paid by Buyer to the Company upon the execution of the Purchase Agreement and the balance shall be paid to the Company at the Close.”
The $1 million cash advance will be used to back out of a prior purchase agreement with Gamynia Limited, which is associated with Playtech, the parent company of the iPoker Network. Earlier this month, WPTE entered into an agreement to sell the majority of its assets to Gamynia for $9.075 million plus 4% of future gaming revenues. The new agreement not only increases the sale price by more than $3.2 million, but it also affords WPTE an additional 1% of future gaming revenues.
Addressing the new buyer, WPTE Founder, President, and CEO Steve Lipscomb commented in a press release distributed late Monday afternoon, “The Board of Directors has determined that PartyGaming’s acquisition proposal is financially superior and we look forward to working with one of the pioneers and leaders in the poker and online gaming markets to provide a strong vehicle for the WPT brand to continue its global expansion and return to online gaming.” WPTE stock, which is traded on the NASDAQ under the same four-letter acronym, closed at $1.05, down $0.01 on Monday. Upon hearing that a second buyer was waiting in the wings, the stock shot up from $0.93 to $1.09 last week.
In a similar arrangement as the Gamynia sale, WPTE will hand over its television library, intellectual property rights, and brand names, which include the WPT and Professional Poker Tour (PPT). The company will retain its cash on-hand and pocket “future license revenues from certain existing Sponsorship deals for Season Seven of the World Poker Tour.” WPTE will not distribute any of the proceeds of the sale to its stockholders; the Los Angeles-based company will use the proceeds as seed money in a business venture outside of poker. WPTE officials could not comment on any future proceedings, citing SEC regulations.
WPTE shareholders must now approve the sale. The company’s SEC filing notes that investors holding 39% of the company’s stock have agreed to vote in favor of the transaction. A stockholders’ meeting will be coordinated in order to vote on the proposal.
According to the filed document, “The Purchase Agreement may be terminated by either Buyer or the Company if the Closing has not occurred by February 24, 2010.” If WPTE officials were to accept an alternative proposal from another buyer, the company would be subject to a $1 million termination fee and, in some cases, a $1 million reimbursement for PartyGaming’s up-front payment.
PartyPoker boasts WPT Host Mike Sexton as its ambassador after the two parties reached an agreement in late April. Sexton is a 2009 Poker Hall of Fame candidate and is currently on-site for the WPT’s Legends of Poker, which wraps up on Wednesday from the Bicycle Casino in Southern California. Attendance at this year’s event was off 25% from last year. The tournament will air as part of Season VIII of the WPT on Fox Sports Net.
Stay tuned to Poker News Daily for the latest WPT sale news.
