GIBRALTAR – Online gaming giant, PartyGaming, sent shockwaves through the poker industry this week when it was revealed that it had purchased the World Poker Tour brand and operations earlier this week.
The sale, made through PartyGaming’s Peerless Media Limited subsidiary, was valued at $12.3 million, higher than the $9.07 million bid World Poker Tour Enterprises (WPTE) received from Antigua-based Gamynia Limited earlier this month. WPTE earlier announced the prospected sale to Gamynia but backed down after receiving a heftier offer from PartyGaming. However, Gamynia will be receiving $1 million as compensation for the botched deal.
The sale, still subject to WPT shareholders approval, will include all of WPTE’s operational assets but will not include “cash, investments and certain excluded assets”.
PartyGaming will be acquiring WPTE’s brand and trade names, television library, including all related intellectual property rights, and “certain assumed contracts and tangible personal property”. It has agreed to pay WPTE 5% from all revenues generated by assets sold for the next three years.
In addition, the next two years of payment on revenues generated by the sold asset will 20% of the payments go into an escrow account “to settle the (WPTE’s) indemnification obligations, if any, arising under the purchase agreement and the related ancillary agreements.”
According to a statement released by WPTE, President and CEO Steve Lipscomb said:
“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.”
WPTE added in its statement that net cash proceeds arising from the sale will be used “to develop or acquire a non-poker related business”.
PartyGaming, which operates wildly-popular PartyPoker.com and other gaming sites, recently acquired British bingo operator Cashcade Limited for $158.82 million, allowing Gibraltar-based PartyGaming control over bingo sites FoxyBingo.com, MirrorBingo.com, ThinkBingo.com and CheekyBingo.com.
It has signed a non-prosecution agreement with the United States of America last year, paying $105 in the process. The deal with the American government is believed to help PartyGaming’s return to the US as soon as the murky online gambling scene is cleared.
