Surprise news of the week came from Reuters, reporting that U.S. poker champion Doyle Brunson had bid $700 million cash for WPT Enterprises Inc. just days after the company known for its World Poker Tour television show launched an online gaming site.
Market rumors of the bid, which were later confirmed by WPT, sent its shares surging almost 59 percent on Friday to a new high of $28.20 on Nasdaq.
The bid offers a 100 percent premium over the Thursday closing price of $17.75 which valued WPT at about $357 million.
“This bid was unsolicited,” Chief Financial Officer Todd Steele told Reuters. “We are going through the normal evaluation process for anything of this nature, and that will likely result in bringing it before the board.”
Steele did not have a date for a board meeting or details of terms of the bid, which was received on Thursday and the company was trying to verify.
WPT spokeswoman Jackie Lapin said the bid was made by Brunson with a team of unidentified financial backers. Later reports from CNBC suggested that the Binion (Vegas land casino operator) family was among those involved with Doyle Brunson, adding that WPTE could earn $2.00 per share next year.
Brunson, 71, one of the best known U.S. professional poker players, was not immediately available for comment. He is in Las Vegas playing in the World Series of Poker…and doing rather well, too.
Nicknamed “Texas Dolly” after his native state, Brunson is widely acclaimed by fans as the best poker player of all time. He has won the World Series of Poker (WSOP) twice and his book, “Super System,” is regarded by some as the “bible” of poker.
Analysts said the offer may seem high on the surface but was not necessarily so when looking at WPT’s business model.
WPT will complete against Britain’s PartyGaming, which went public last month in London’s biggest float in five years, and rival Sportingbet, which offer real-money poker and other casino games online, together with many other serious competitors such as Prima Poker and Poker Room.com.
West Hollywood, California-based WPT Enterprises, which was founded in March 2002, went public in August last year at $8 a share, raising $32 million.
WPT develops products based on gaming with World Poker Tour airing on U.S. Travel Channel and over 60 markets worldwide.
About 70 percent of WPT is owned by two stakeholders; Lakes Entertainment Inc. (Nasdaq:LACOE – news) owns about 62 percent of the company and co-founder and Chief Executive Steven Lipscomb owns about 8.2 percent, according to company data from April.
Lakes Entertainment shares were up 25.93 percent at $18.70 on Friday morning on Nasdaq before a trading halt.
Lakes said in a statement that as a majority shareholder of WPT it was reviewing the offer