By
Dan |
Published
Nov 02 2009, 02:21 PM
|
Despite a last-minute $36.5 million bid by Mandalay Media, World Poker Tour Enterprises (WPTE) shareholders officially rubber-stamped a $12.3 million sale to Peerless Media, a subsidiary of Party Gaming. The 85% to 15% vote of stakeholders took place on Friday in Los Angeles and the sale will likely be finalized this month. Its impact on the WPT is not yet known. The news marks the end of a roller coaster ride for WPTE officials, who had originally entered into an agreement with a subsidiary of Playtech, which owns and operates the popular iPoker Network.
Mandalay Media submitted two proposals to purchase the rights to the WPT in the days leading up to a special shareholders meeting on Friday. In response to the new options, WPTE officials commented in a press release distributed on Monday, “The board of directors of WPTE reviewed the Mandalay Proposal and concluded that it was not a Superior Proposal (as defined in the Agreement). On October 30, 2009, WPTE received a modified written offer from Mandalay Media. On October 31, 2009 the board of directors of WPTE reviewed the Modified Mandalay Proposal and concluded that it was not a Superior Proposal.” Both proposals from Mandalay Media were therefore dismissed and shareholders did not consider either last week.
The second offer tendered by Mandalay Media was worth
$36.5 million. It consisted of $28.5 million in cash, $5 million in Mandalay common stock, and 5% of future WPTE-related revenues, which were guaranteed to be worth at least $3 million over the next three years. The package was worth about $1.77 per share, which Mandalay Media noted “represents a 61% premium over the value at closing of your proposed asset sale with Peerless and a 28% premium over WPTE’s closing price.”
WPTE stock is traded on the
NASDAQ under the same abbreviation. At the close of trading on Thursday, the day before the second offer was received, WPTE was fetching $1.11 per share. To open business on Friday, the stock had mushroomed to $1.42 per share, a jump of 28%. However, it began Monday trading at $1.11 and, at the time of writing, had dropped to $1.10. Over the last 52 weeks, WPTE stock has trended between $0.15 and $1.95 per share and, at one point, faced de-listing from the NASDAQ for holding a price that was less than $1.
A total of 68% of the common shares were represented at the special stakeholders meeting on Friday. When the final vote was tabulated, 85% approved the proposal from Party Gaming, which represented 58% of the shares outstanding. The sale should be finalized by the end of November.
As part of Party Gaming’s proposal, WPTE officials received
$12.3 million in cash less payments due to the online gambling behemoth that were expected to total around $1.5 million. In addition, WPTE receives
5% of future gross gaming revenues and
5% of other revenues associated with the franchise. Party Gaming guaranteed WPTE that the revenue share would be at least $3 million over a three-year period. WPTE owes $1 million to
Gamynia Limited, a subsidiary of Playtech, for breaking a prior agreement to sell the roving tournament series.
The bid from Party Gaming was revealed back in mid-August, when a cryptic form was filed with the NASDAQ Stock Exchange. It read in part, “The Company's Board of Directors has received an alternative acquisition proposal and is following the process required by the Purchase Agreement. Until the process required by the Purchase Agreement is completed, the Company will delay the filing of a preliminary proxy statement with the SEC.”
Mike Sexton (pictured at right),
PartyPoker’s ambassador, was recently elected into the Poker Hall of Fame and serves as the WPT’s longtime host alongside Vince Van Patten.
WPTE officials are currently gearing up for the
Foxwoods World Poker Finals, which kicks off on Thursday from the New England casino. The $10,000 buy-in tournament crowns a winner five days later. Last year, Jonathan
FieryJustice Little outlasted a field of 412 entrants en route to a $1.1 million payday and his second WPT title.
Read the final
WPTE proxy statement to shareholders outlining the terms of the Party Gaming sale.