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WPT says $700 million offer may be a bluff

WPT Enterprises Inc. Monday said it was still unable to verify a recent takeover bid and that the company was willing to let the offer expire if the bidders fail to provide more information.
BRUNSON
An investor group led by poker legend Doyle Brunson reportedly made a $700 million bid for WPT Enterprises late last week. The company, however, says the unsolicited offer may be a bluff, as it has run into difficulty getting key details on the deal.Joe Cavaretta / AP
/ Source: Reuters

WPT Enterprises Inc. Monday said it was still unable to verify a recent takeover bid and that the company was willing to let the offer expire if the bidders fail to provide more information.

WPT's difficulty in getting key details cast doubt on the offer's credibility and sent its shares tumbling by as much as 15 percent before recovering somewhat.

On Friday, WPT shares soared 50 percent to nearly $30 after the company said it had received an unsolicited $700 million acquisition offer from an investor group led by U.S. poker champion Doyle Brunson. The offer represented a massive, 100 percent premium to Thursday's Nasdaq closing price of $17.75 a share, when the company was valued at about $357 million.

But ever since the offer, WPT said it has been unsuccessful in getting more information from its bidders.

For one, the offer came from the Las Vegas-based law firm of Goodman and Chesnoff, which claimed to represent the group, WPT said.

But WPT was recently told that Goodman and Chesnoff are no longer involved in the matter, WPT said in its statement Monday, adding that it could not obtain further information over the weekend.

The bid's term sheet said the offer expires Tuesday at 5:30 p.m. with a one-week extension provision.

"From our standpoint, I don't know why they wouldn't request an additional week," said David Bain, an analyst with Merriman Curhan Ford and Co., a San Francisco-based investment bank.

Bain rates the stock a "buy" and does not own shares.

"I believe the offer is more likely than not, but it's definitely getting murkier," Bain said.

The West Hollywood, California-based company 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.

"If the offer cannot be substantiated and accepted by Tuesday at 5:30 p.m., the offer will lapse by its own terms," WPT said in a statement.