Benzinga | Mar 22, 2021 09:04AM EDT

Allied Esports Reports Execution Of Revised Stock Purchase Deal With Element Partners: Overall Purchase Increased From $68.25M To $90.5M

Allied Esports Entertainment, Inc. (NASDAQ:AESE) (the "Company" or "AESE"), a global esports entertainment company, today announced that it has entered into a revised stock purchase agreement with Element Partners, LLC ("Element") to sell all of the outstanding capital stock of each of the legal entities that collectively operate or engage in the Company's poker-related business and assets (the "WPT Business"). The revised stock purchase agreement:

* increases the overall purchase price from $68.25 million at closing and $10 million guaranteed revenue share payments paid over three years after closing, to $90.5 million, all payable at closing;

* increases the initial deposit of the purchase price from $4.0 million to $10.0 million;

* increases the termination fee payable to Element if AESE accepts a competing acquisition proposal, or consummates an acquisition proposal within 12 months after termination of the revised stock purchase agreement, from $3.0 million to $3.45 million;

* extends the date on which AESE and its subsidiary, Allied Esports Media, Inc., or Element may terminate the revised stock purchase agreement if any conditions to the closing have not been satisfied (and such terminating party is not in material breach of the revised stock purchase agreement) from March 31, 2021 to September 30, 2021 (the "Outside Date"); and

* increases Element's non-performance fee from $3.0 million to $10.0 million, and eliminates the ability of Element to terminate the revised stock purchase agreement prior to the Outside Date by paying the non-performance fee.

The Company's 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 ("Bally's") to acquire the WPT Business for $90.0 million. 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 transaction is expected to close in late April 2021, assuming the Company's shareholders approve the transaction and following required regulatory approvals and other customary closing conditions.