The saga that is the takeover of the World Poker Tour (WPT) has a new chapter. Seller Allied Esports Entertainment, Inc. (NASDAQ:AESE) said it received a better offer from Bally’s Corp. (NYSE:BALY).
Word from Allied on the new Bally’s bid surfaces just three days after the seller altered an agreement with Element Partners, LLC to sell the poker business for $90.5 million — a proposal that slightly topped the $90 million the casino operator previously offered for WPT.
Allied and Element came to terms on WPT in January. But there was wiggle room in that pact for the seller to mull a “superior proposal.” Three weeks ago, Bally’s entered the fray by proposing a $100 million outright takeover of Allied, though that offer was far below the California-based company’s market capitalization at the time.
Potentially scorning Element again, Allied appears poised to sell WPT to Bally’s for $105 million in cash.
Another Bid for WPT?
Allied Esports is in the enviable position of having an asset that multiple parties want to acquire, meaning it’s possible Element makes another bid. The privately held company hasn’t confirmed it will do so. But if that move is in the cards, the suitor is on the clock.
The company notified Element that it intends to terminate their stock purchase agreement unless, prior to 5:00 p.m. Pacific Time on March 29, 2021, the company and Element negotiate an amendment to their pending stock purchase agreement, such that the Bally’s proposal no longer constitutes a Superior Proposal,” according to a statement issued by Allied.
Bally’s $105 million pitch for WPT is perhaps compelling to the seller on the basis that Allied’s market value as of today is $102.6 million. That could be a sign financial markets are under-valuing the business in its current form, and another parent company could wring more out of it than Allied is.
However, Allied is careful to note there can be no assurances it “will enter into a definitive agreement with Bally’s or consummate any transaction with Bally’s.”
Good Fit for Bally’s
Acquiring WPT jibes with Bally’s efforts to diversify its portfolio beyond traditional casino operations and push further into higher margin areas, such as online gaming and sports wagering.
WPT is broadcast on FOX Sports Regional Networks (RSNs) in the US, meaning there’s some synergies with Bally’s partnership with Sinclair Broadcasting, where the gaming company’s name is applied to 21 RSNs.
Beyond that, WPT is televised internationally and is available in Australia, Canada, France, and the United Kingdom, in addition to the US. As highlighted by the announced purchase of UK-based Gamesys for $2.7 billion earlier this week, Bally’s acquisition plans are not confined to US borders.
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