WPTE shareholders choose PartyGaming bid over $35m challenge

PARTYGAMING’S WORLD POKER Tour Enterprises (WPTE) offer has been accepted by shareholders, despite a challenge to the deal from a third party valuing WPTE at more than twice what Party is expected to pay.

Mandalay Entertainment, a Los Angeles-based mobile phone entertainment business, last week wrote to the WPTE board proposing it make a $35m offer for WPTE, which is expected to be sold to PartyGaming subsidiary Peerless Media for US$12.3m cash and an ongoing 5% revenue share relating to the purchased assets.

However speaking to EGRmagazine.com today, a PartyGaming spokesman said the Party offer was accepted by shareholder at 10am Pacific Standard Time on Friday. “WPTE shareholders have approved the deal and we are hoping to close shortly,” he said.

Party’s offer in August itself scuppered an earlier deal between WPTE and investment group Gamynia, which was to pay WPT US$9m plus a percentage of future revenues from the World Poker Tour and Professional Poker Tour brands. However the deal which contained a clause allowing WPT to drop out if a better deal was submitted before the Gamynia deal was approved by shareholders.

Under the offer proposed, Mandalay would pay cash and stock worth $1.69 per WPTE share, pricing the business at a 54% premium over the WPTE’s closing price on 26 October; and a premium of approximately 23% over the implied value at closing of WPT`s pending asset sale with Peerless Media.

In a letter to the WPT Board, Mandalay co-chairman Robert Ellin described the Mandalay offer as a “superior proposal” as the term is defined under the asset purchase agreement with Peerless, and stated that the proposed asset sale with Peerless provides no payment or distribution of any kind to WPT`s shareholders unlike the Mandalay proposal.

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