PokerWorks

WPT Enterprises announced earlier in August that it was prepared to sell its assets, including intellectual property rights and brand names, to Gamynia Limited, a privately held investment group  with operations in Cyprus. But upon making it known that the WPTE board of directors was still to vote on the sale, other companies had the option to make counteroffers, which is exactly what PartyGaming did by bidding $12.3 million, a number that was accepted by WPTE. On behalf of its subsidiary, Peerless Media Ltd., PartyGaming now looks to be in position to complete the deal and take control of WPTE’s assets.

On August 24, the latest press release confirmed that Peerless had agreed to purchase WPTE’s operating assets, with the exclusion of cash and cash equivalents, investments in debt securities and put rights, other investment and litigation assets, and future license revenues from some of the existing sponsorship deals from the World Poker Tour’s seventh season. The purchase price was $12.3 million, and $1 million of that sum was paid upfront in order to cover the cost of terminating the intended agreement with Gamynia. WPTE will also receive five percent of participation in gaming and other revenues on an ongoing basis.

Similar to the Gamynia agreement, the Peerless Media contract allows for the company to pick up the WPTE television library, including all intellectual property rights, brand names, trade names, associated contracts, and personal property. And the final transaction must be approved by a majority of those holding outstanding common stock in WPTE. A future meeting of stockholders will address the vote, though it was noted in the release that stockholders with 39 percent of the shares already committed to vote in favor of the Peerless Media deal.

WPTE President and CEO Steve Lipscomb stated, “PartyGaming has been an important partner for a number of years and we are confident that they will be an excellent manager of our brands in the future. 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.”

Original and continuing commentator of the World Poker Tour, Mike Sexton, has had a longtime association with PartyPoker, a subsidiary of PartyGaming, and it was in May of 2009 that he renewed his relationship with the company to be its host, consultant, ambassador, and player. It also may not be a coincidence that earlier in the year, PartyGaming settled its dispute with the United States Department of Justice in order to clear its name with the U.S. government, presumably to clear a path for reentry into the American market should the pertinent laws change. While it is clear that PartyGaming has the power and ability to grow the WPT brand in Europe and beyond, its ability to come back to America in due time may have also played a role in the decision to purchase the WPTE assets.

As for WPTE, the company plans to use the cash from the sale to develop or acquire a non-poker related business. Stockholders will receive no dividends from the sale, which looks to be completed within the coming months.