The back and forth on who buys the World Poker Tour is coming to a head once again. In a press release issued this morning, Allied Esports — the owners of the WPT brand — announced that it will be holding a shareholders meeting to approve the sale on June 28, 2021.
At the meeting, the stockholders will be asked to consider the sale of Allied's 100% holding in Club Services Inc to Element Partners LLC.
Club Services is the subsidiary of Allied that holds the WPT brand and related assets, along with any other poker related holdings.
The press release explains that Allied "is providing an update regarding its special stockholder meeting to be held on June 28, 2021 to consider and approve the Company’s sale of 100% of the outstanding capital stock of Club Services, Inc., or “CSI,” to Element Partners, LLC."
If passed, this will finally resolve the long-running sale of the WPT.
Allied has been looking to divest its poker-related business for a while, to focus on more traditional esports. After overcoming several hurdles, just one more remains, arranging for Allied's overseas shareholders to vote. This is complicated by the various jurisdictions of the companies. To help untangle the mess, some background:
The story so far
Element Partners originally made an offer to Allied for the purchase of Club Services back in January, 2021. The deal was looking good, there was $78 million on the table and everything seemed ready to go.
Then Bally's Corporation took an interest in March. Bally's made an offer that Allied couldn't refuse. Literally, Allied's shareholder's agreement required the board to review any materially better offer. Bally's Corp's offer was better. So Element hit the skids for a while.
In the end, Element issued a counteroffer. A period of quiet ensued as the various parties negotiated behind closed doors. Until today, when it appears that Element won out.
If Allied, Element, Bally's, and Club Services aren't enough companies to keep track of, there is an additional layer to the sale. This is where the whole deal slows down to untangle itself from various international requirements.
International complications
Ourgame International Holdings Limited enters our game now. Ourgame is important because it owns 100% of Primo Vital Limited. This matters in turn because Primo is a major stockholder in Allied. Primo has a 30.6% stake in the esports company. The chain of ownership runs as follows: The WPT is owned by Club Services is owned by Allied is owned in part by Primo is owned by Ourgame.
If that's clear, then we can begin.
Because of the way corporate ownership works, Ourgame will be casting almost a third of the votes (via Primo) at Allied's shareholder meeting on June 28.
While Allied is listed on the NASDAQ stock exchange located in New York City, Ourgame is listed in Hong Kong. To quote the press release, the rules of the Hong Kong Stock Exchange "requires Ourgame to obtain approval from its stockholders prior to voting its shares of [Allied]’s common stock owned by Primo."
This means that Element has to sit on its check for two weeks while Ourgame gets permission to give permission to Allied to sell Club Services to Element. Stuff like this is why financial journalists don't get invited to parties much.
The WPT already has deals in place for Ballys Sports to show the WPT on its various channels in the U.S. However, this may have been contingent on the previous deals. We will have more details on the fate of the WPT after the votes are cast on June 28, 2021.
Featured image source: Flickr by WPT
