By Joss Wood, Rakeback.com Poker News Staff Writer
The rumours seemed unbelievable but it now looks like PokerStars is buying Full Tilt. A tweet from Alex Dreyfuss, Chief Executive of Chili Gaming, said:
“Pokerstars buys FullTilt for a consideration of $750m, including settlement with DOJ and full balances of players (330m). I'm impressed.”
No statement has yet been made by PokerStars, but 2+2 forum super moderator Mike Haven posted:
“I can't confirm that this is true, because of NDA reasons, but I can say that a welcomed press release may follow in the near future.”
Bernard Tapie’s deal which we have all been following looks like it has failed to convince the DoJ. Gaming industry sources are quoting "unresolvable legal complications and failure to agree on player repayment plan" as the reasons why the GBT deal collapsed.
In the last few minutes, a full statement has been released by GBT:
“Groupe Bernard Tapie regrets to announce that, after seven months of intensive work, our efforts to obtain final approval of the United States Department of Justice of the agreement to acquire the assets of Full Tilt Poker have ended without success.
Ultimately, the deal failed due to two major issues.
The parties could not agree on a plan for repayment of ROW players.
GBT proposed a plan that would have resulted in immediate reinstatement of all ROW player balances, with a right to withdraw those funds over time, based on the size of the player balance and the extent of the player’s playing activity on the re-launched site. All players would have been permitted complete withdrawal of their balances, regardless of whether they played on the site, by a date certain, and 94.9% of ROW players would have been fully repaid on day 1. DOJ ultimately insisted on full repayment with right of withdrawal within 90 days for all players– a surprise demand made in the 11th hour, after months of good-faith negotiations by GBT.
The legal complications surrounding the deal – specifically, questions surrounding the legality of the forfeiture under non-US laws – also proved unresolvable.
All of the key assets of the FTP companies reside outside of the United States. A non-US court well might regard the purported forfeiture as a “fraudulent transaction” and declare it invalid or deem the acquirer of the assets responsible for all of those creditor obligations.
Given the $80 million purchase price, and the substantial amount of cash needed to relaunch FTP, those issues ultimately proved too substantial to overcome.
GBT is very conscious of the hopes it has created – among FTP employees that they will retain their jobs, among FTP players that they will recover their balances, and among the entire poker community that the world’s finest poker platform will be relaunched and bring a needed added element of competition to a world market that today is fully dominated by a single operator.
GBT cannot accept the end of those hopes.
For that reason, unless a concrete and legally viable solution is found in the very coming days to save the employees and repay the players of FTP, we will move to our own plan of action.
We understand from press reports that the DOJ may have entered into an agreement with PokerStars pursuant to which PokerStars will acquire the FTP assets. If accurate, we can only assume that PokerStars determined that it was willing to accept these legal and financial risks in order to resolve its own legal situation with DOJ. If a PokerStars acquisition of FTP means that all FTP players will be fully repaid immediately, we are very happy for the players, as their final and full repayment has always been our priority.
We only regret that such a deal would signal further consolidation of a poker market already dominated by a single player – an outcome that may raise antitrust concerns and that, in the long run, is probably not good for players and for the whole online poker industry.”
PokerStars must have been waiting in the wings to instantly take advantage of the situation. It seems amazing that PokerStars could have kept the negotiations so dark for so long. The due diligence on legal problems and financial liabilities must have involved a huge number of people.
Assuming the deal goes through PokerStars will have removed one legal threat as they will own the intellectual property rights to Rush Poker. With Zoom poker taking so much of the market this advantage has a real value.
PokerStars has released the following statement:
"We've had a lot of enquiries and there's lots of speculation on the forums, so I wanted to address the PokerStars chatter. As you know, PokerStars is in settlement discussions with the U.S. Department of Justice. As such settlement discussions are always confidential, we are unable to comment on rumors. As soon as we have information to share publicly we will do so."
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