News Update: April 25th, 2012

April 25, 2012, Posted by Daniel.Smyth

PokerStars to Buy Full Tilt?

The poker industry can often be a crazy one, but the last 24 hours things just got a whole lot crazier. After hints from a few high stakes players over the last few days, the most notable being Daniel “Jungleman” Cates, news began to filter through yesterday that Full Tilt had been bought by PokerStars.

At this point it’s important to stress that this is unconfirmed but the signs are that the deal could be in progress. One fact that is certain is that Groupe Bernard Tapie, the French company who’ve been working to buy Full Tilt over the last few months, has now been sidelined.

Citing a breakdown in communication regarding the repayment schedule to players, GBT have officially declared their involvement with the takeover dead. In a post on iGaming a representative said:

“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”

Many insiders in the industry have pointed to PokerStars as being the ones who are due to take control of the takeover and become the eventual owners of the company.

In a tweet posted yesterday, Alexandre Dreyfus, CEO of Chilipoker, said: “Pokerstars buys FullTilt for a consideration of $750m, including settlement with DOJ and full balances of players (330m). I'm impressed.”

PokerStars have been flooded with requests for information, but at the moment it appears as though they are staying tight-lipped:

“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 rumours. As soon as we have information to share publicly we will do so.” - Eric Hollreiser Head of Corporate Communications for PokerStars

Where the story goes from here is unclear but it seems that after months of fairly tame activity behind closed doors there could finally be a breakthrough in the Full Tilt saga.

Indeed, if PokerStars do acquire the company it will likely alter the poker landscape in a way that people never expected.