PartyGaming Enters Bid For World Poker TourAugust 25, 2009 7:10 am
The World Poker Tour announced at the beginning of August that they would be selling their assets to Gamynia Limited for $9,075,000 plus 4% of future gaming revenues but have now decided to accept a more attractive offer from Peerless Media Ltd, a subsidiary of PartyGaming who own Party Poker.
The new offer of $12.3 million improves the previous bid by $3.2 million, while raising the future share of gaming revenue for WPTE to 5%. Steve Lipscomb, the CEO of WPTE said:
“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.”
The acquisition of The World Poker Tour assets by PartyGaming follows a logical progression as it is the WPTE biggest customer and in the first half of 2009 provided 30% of the company’s revenue. If the deal goes through it will mark the companies first re-engagement in the US market since it withdrew in October 2006 following the US online gaming ban.
This April PartyGaming settled its differences with the US government for $105 million and Jim Ryan, CEO of PartyGaming said:”We are now well-placed to seize organic as well as strategic opportunities that previously were beyond our reach.”
Retracting the original agreement with Gamynia will mean incurring a $1 million penalty which is written into the new agreement with PartyGaming in the form of a cash advance. The latest offer “may be terminated by either Buyer or the Company if the Closing has not occurred by February 24, 2010,” and just as with Gamynia if WPTE accepts an alternative offer in the meantime they would again incur a $1 million termination fee.
Stockholders will now have to approve any new deal before it can be finalised and this is likely to take place towards the end of 2009.