Allied Agrees Revised Stock Agreement With Element Partners Including WPT

Allied Esports Entertainment has agreed to sell all of the remaining capital shares of any of the legal entities that jointly run or participate in its poker-related enterprise and properties to Element Partners under a revised stock purchase arrangement.

The deal, which includes the World Poker Tour, comes after AESE rejected Element’s previous bid of up to $78.25 million in favour of a $90 million offer from Bally’s Corporation.

Revised deal

The amended deal, which is due to close in April 2021, lifts the total selling price from $68.25 million at closing plus $10 million in guaranteed income sharing payments over three years to $90.5 million at closing.

The initial deposit for the purchase price has been increased from $4 million to $10 million, and the termination charge owed to Element if AESE approves a rival acquisition proposal or completes an acquisition proposal within 12 months of termination of the amended stock purchase agreement has been increased from $3 million to $3.45 million.

Deadline extended

In addition, the deadline for AESE and its affiliate, Allied Esports Media, or Element to cancel the amended stock purchase agreement if any closing requirements are not met has been extended from March 31, 2021 to September 30, 2021.

Finally, Element’s non-performance compensation has been increased from $3 million to $10 million, effectively excluding the firm’s right to cancel the amended stock purchase arrangement prior to the outside date by paying the non-performance fee.

In detailing it’s revised edition AESE reported that its “board of directors unanimously approved the revised stock purchase agreement. In connection with approval of the revised stock purchase agreement, the company’s board of directors, in consultation with its financial and legal advisors, compared the terms of the revised stock purchase agreement to the terms of the proposal received from Bally’s Corporation to acquire the WPT Business for $90m. 

“After such review, the board of directors determined that the Bally’s proposal did not constitute a ‘superior Proposal’ (as such term was defined in the stock purchase agreement with Element).”

The deal is scheduled to close in late April 2021, provided the company’s shareholders support it and all other necessary regulatory approvals and closing conditions are met.