Groupe Bernard Tapie abandons deal for Full Tilt Poker

Groupe Bernard Tapie

Groupe Bernard TapieGroupe Bernard Tapie has pulled out of a deal to buy Full Tilt Poker and start it up as a new company. Rumors had been swirling around for most of the day and a statement was the released by the Group to the iGaming Post,  stating:

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.”

The even bigger bombshell was that none other than PokerStars had hijacked the deal. Rumors had been flying around on TwoPlusTwo since last night and Alexandre Dreyfus, CEO of ChiliPoker, tweeted: “Pokerstars buys FullTilt for a consideration of $750m, including settlement with DOJ and full balances of players (330m). I’m impressed.”

In one fell swoop the month of April could see the online poker landscape change yet again and if reports are to be believed it again involves two of last year’s main protagonists.

At this stage we must stress that these rumors about a buyout from PokerStars are very much that and there is no suggestion Stars have begun any discussions. So until there’s an actual statement from the firm there’s a lot of speculation out there. If the rumors are true the huge price being quoted by Dreyfus means that PokerStars are once again acting in the best interests of the players and that’s something to be commended.

In the mean time, PokerStars and DoJ…we’re all ears!