Allied Esports Entertainment drops Element in favour of Bally’s bid

Allied Esports Entertainment has once again made the decision to terminate an agreement with Element Partners regarding the purchase of the group’s poker-related business, after Bally’s returned with another proposition.

Earlier in the week, the group noted that it was shelving Bally’s prior offer after entering into a revised stock purchase agreement with Element to sell all of the outstanding capital stock of each of the legal entities that collectively operate or engage in its poker assets.

The transaction, which includes the World Poker Tour, comes after AESE had ditched Element’s previous up to $78.25m offer in favour of a $90m proposal that was tabled by Bally’s.

However, the revised agreement was to increase the overall purchase price from $68.25m at closing and $10m guaranteed revenue share payments paid over three years after closing, to $90.5m which would have all been payable at closing.

Subsequently, Bally’s has returned once more, with the company saying that its board of directors, in consultation with its financial and legal advisors, constitutes a “superior proposal” under its pending stock purchase agreement.

Under the terms of Bally’s proposal, the firm would acquire all of the equity interests of Club Services, an indirect wholly-owned subsidiary that directly or indirectly owns the company’s poker-related business and assets, including the entities comprising the WPT, for consideration totaling $105m in cash at the closing.

AESE has notified Element that it intends to terminate their stock purchase agreement unless, prior to 5:00pm Pacific Time on March 29, 2021, the pair negotiate another amendment to their pending stock purchase agreement, such that the Bally’s proposal no longer constitutes a superior proposal.

It is added that “there can be no assurance that the company will enter into a definitive agreement with Bally’s or consummate any transaction with Bally’s”.