Mandalay Media raises the Stakes for the WTP

It was just a couple of months ago that PartyGaming (PRTY.L), through its subsidiary Peerless Limited, outbid Gamynia Limited, a Playtech (PTEC.L) subsidiary for the purchase of the Worl Poker Tour Enterprise (NASDAQ:WPTE) assets. With a $12.3M offer it seemed that PartyGaming move to conquer yet another poker fortress was a done deal. 

Along came Mandalay Media Corp (OTCBB:MNDL), a global publisher and distributor of branded entertainment for 3G network, and outbid PartyGaming’s offer. Mandalay Media Corp offered to purchase the WPTE for a total sum of $36.5M. The offer consists of: $28.5M of cash; $5M in Mandalay common stock; 5% revenue share, including a guarantee for the payment of at least $1M per year for 3 years. 

Mandalay offer to the WPT Enterprise represents a premium of around 61% over the WPT shares (Oct 26th value) and around a 28% premium over Peerless Limited offer. 

The World Poker Tour Enterprise has yet to publicly respond to Mandalay offer. Should the WPT decide to accept Mandalay’s offer and forgo its agreement with Peerless Limited it will have to pay Peerless a $1M termination fee. This will be added to the $1M termination fees forced upon WPTE after canceling their agreement with Gamynia on August this year. 

WPTE stocks reacted with a surge, opening Oct 30 trade with 1.45, after previous day 1.11 close. However by the end of the trading day they came back to their previous value, closing again at 1.11.