4 Minutes Read
The shareholders of Ourgame International Holdings, Ltd. and Allied Esports Entertainment have officially approved the World Poker Tour’s sale to Element Partners LLC for $105 Million, with WPT CEO Adam Pliska receiving $1 Million for facilitating the sale. The deal was formalized in a special meeting of Allied Esports Entertainment’s stockholders on July 1, three days after Ourgame approved the transaction.
In a press release issued by WPT, Pliska was quoted as saying, “WPT management looks forward to this new chapter for the WPT and to the announcement of new initiatives in the near future as we prepare for our 20th anniversary next year and the further expansion of the WPT.”
“This is a momentous day for AESE and an opportunity to focus on growing the business in exciting and innovative ways,” said Frank Ng, CEO of Allied Esports Entertainment. “Congratulations to Adam Pliska and his entire team at World Poker Tour as they too move into a new, successful chapter.”
Element Partners Acquires WPT After a Year-Long Bidding War With Bally’s
Talks between Allied, which owns WPT and various other esports platforms, and Element Partners over the sale of WPT had been going on since last year. They initially tabled a bid of $78.25 Million. As part of the initial offer, $68.25 Million was to be paid upfront in cash, and the remaining $10 Million to be paid over the next three years with a fully guaranteed 5% revenue share of WPT-branded tournament entry fees on Element-owned or licensed gaming platforms.
The matters started getting complicated when Bally’s Corp. entered the fray and tabled an unsolicited bid of $105 Million to purchase Allied’s poker assets. This forced Element’s hand to raise the bid to $90.5 Million. This bid was rejected by the Allied board as they considered Bally’s bid superior.
However, not one to lie down, Element upped their offer again. But, instead of coming back with a higher bid, they matched Bally’s offer. Allied’s board accepted Element’s proposal as they deemed Bally’s offer was “no longer superior.”
However, things were just beginning to get murkier.
Ourgame Directors Fail at an Attempted Coup
On June 11, Allied Esports Entertainment announced a special stockholder meeting set for June 28. They would then consider and approve the company’s sale of 100% of the outstanding capital stock of Club Services Inc (WPT). The announcement mentioned that Ourgame International Holdings was the largest stockholder with 30.6% of common stock. That meant Ourgame had to obtain approval from its stockholders in a meeting scheduled on June 30.
The June 28 meeting of Allied Esports stockholders did not go as planned. Allied announced that the lack of a quorum for a vote meant that the matter remained outstanding. They rescheduled the meeting to July 1 and even moved it to a webcast so more stockholders could participate.
As it turned out, the Ourgame board’s approval of the deal was the problem. An internal conflict within Ourgame’s boardroom erupted over how the company would distribute its share of the WPT sale proceeds. This led to the ouster of three of the company’s board members, Gao Hong, Fu Qiang, and Hu When. The three directors owned a combined 26.99% stake in Ourgame through a separate company. An internal investigation revealed that three were debt-ridden, and the group owed money on at least six judgments and had dozens of other pending lawsuits. They later attempted to pull off a corporate coup but ultimately failed. All of these led to further delays in the finalization of the WPT sale.
Ourgame still controls a significant share in Allied Esports, and final approval could not be granted without a vote from Ourgame. On June 28, the company finally gave the nod to the sale, but it was still a tight vote, with the proposal passing by a 54.4% to 45.6% margin.
The three former board members’ demand to funnel the majority of the sale’s proceeds to a struggling company named Irena Group, for which they themselves serve as executives, was ultimately defeated, and now the funds will instead be used for Ourgame’s other business interests.
Following Ourgame’s approval of the WPT sale, Allied Esports proceeded to conduct its own vote through a video conference facilitated by the company’s CEO Frank Ng. Allied shareholders yet to cast their vote via proxy all took part in the six-minute video conference and quickly approved the sale.
Ourgame’s History With Allied
After the crackdown by the Chinese government on online poker and gaming apps, which crippled the growth of live poker in China, Ourgame decided to withdraw from the business. They sold Allied Esports and WPT to Black Ridge Acquisition Corp, which combined the two assets and rebranded it as Allied Esports.
The new company retained executives from both Ourgame and WPT. Lyle Berman was appointed the new chairman, while Eric Yang and Frank Ng, who was the chairman of Ourgame, were named the vice-chair and CEO, respectively. Adam Pliska was elected as the president.
With the new structure in place and Ng stepping down as CEO, it was assumed that Ourgame was wrapping up its poker operations. However, corporate filings in Hong Kong and the USA revealed that was not the case as they still owned a 30.06% stake in the company.
Present Scenario After Sale of WPT to Element
Allied Esports remains in existence, owning a significantly reduced portfolio of esports-related assets. The sale also removes WPT from public ownership. Unlike Allied Esports, which traded on NASDAQ as AESE, Element Partners is a privately-held company.