By Kory Travers | November 3, 2009

Despite receiving a last minute bid from Mandalay Entertainment, World Poker Tour Enterprises (WPTE) shareholders voted Friday to approve its pending sale to PartyGaming for $12.3 million. In an official statement filed with the US Securities and Exchange Commission, the WPTE claimed that the Mandalay offer—worth $36.5 million—did not constitute a superior offer over PartyGaming’s bid despite the large cash discrepancy.

News of the Mandalay Entertainment offer first came to light on Thursday of last week when the company’s Chairman of the Board of Directors, Robert Ellin, authored a letter to WPTE requesting they postpone their shareholders meeting to adequately consider the proposal. The meeting took place Friday afternoon as scheduled and, according to the 8-K form filed by WPTE, representatives for nearly 70% of the common shares of the company were in attendance.

The PartyGaming sale was approved by the shareholders in attendance by an 85% to 15% margin even after taking the time to review Mandalay’s proposal. A statement from WPTE issued on Monday explained their assessment of the Mandalay offer. “On October 29, 2009 WPTE received a written offer from Mandalay Media to merge Mandalay Media with WPTE for the payment of cash and stock in Mandalay Media…The board of directors of WPTE reviewed the Mandalay Proposal and concluded that it was not a Superior Proposal (as defined in the Agreement). On October 30, 2009, WPTE received a modified written offer from Mandalay Media. On October 31, 2009 the board of directors of WPTE reviewed the Modified Mandalay Proposal and concluded that it was not a Superior Proposal.”

Despite revamping their initial offer, Mandalay was unable to persuade WPTE shareholders to change their minds about the deal with Peerless Media (a subsidiary of PartyGaming). Under the proposal from Peerless Media, WPTE shareholders will receive $12.3 million plus a percentage of future gaming revenues. The sale stipulates that WPTE shareholders will receive at least $3 million over three years from aforementioned gaming revenues. The money from the purchase will not be refunded to shareholders and will instead be used to invest in a future non-poker related business venture.

The Mandalay offer included a cash payout to shareholders, but the shareholders though the Peerless Media deal was a more promising venture. The WPTE press release made no mention of the rationale behind the decision that Mandalay did not present a superior offer. The deal with PartyGaming should be finalized during the first part of this month. In the meantime, World Poker Tour Season VIII continues on as planned with the Main Event of the World Poker Finals at the Foxwoods Resort and Casino in Connecticut kicking off on Thursday.

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