PokerStars to buy Full Tilt?

Posted on by RTR Dave
 

After lots of rumours and whisperings underneath card tables, several reports circulating in the last couple of days seem to firmly suggest that PokerStars is set to buy former competitor poker site Full Tilt.

The news comes after Group Bernard Tapie’s intention to buy collapsed following a failure from either party to agree on terms regarding the repayment of player funds. Group Bernard Tapie issued a statement which referred to what they deemed to be “unresolvable” legal complications with regard to repaying players.

A tweet from CEO of Chilipoker Alexandre Dreyfus stated that PokerStars would be buying Full Tilt for $750 million – a sum which supposedly includes the $330 million owed to players.

Although there has been a lot of talk on this topic for a while, officially the news about PokerStars purchasing Full Tilt is still a rumour, and as such Eric Hollreiser, Head of Corporate Communications at PokerStars issued 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.”

—- UPDATE 04/05/2012————-

It has come to light that on 24th April – only a short time before news of PokerStars buying Full Tilt broke – Laurent Tapie (GBT’s Principal, and Key Negotiator) sent an email to key Full Tilt figures asking them to reconsider. The email was as follows…

“Dear All,

Considering the work we have been doing together to relaunch FTP over the last 7 months, I feel it is my duty to inform you on the current situation, and my plan, before I release a press statement in the coming hours.

The deal with DOJ is off, and the negotiations are terminated.  Ultimately, DOJ refused to accept GBT’s proposal for repayment of the ROW players – a proposal that we thought had been accepted – and, on 14 April 2012, informed my lawyer that they could only agree on an agreement where GBT would repay 100% of the 184M$ value of ROW players balance in a maximum of 90 days.

That clearly made the deal unworkable. And I believe no one would accept such terms.

I continue to believe that our plan for repayment was fair.  We would have made all ROW players’ balances available for play on the relaunched site immediately.  Furthermore, we would have repaid (allowed withdrawal of funds for) 94.9% of ROW players day 1, 4.9% of ROW players in 18 months and only 0.2% of these players in more than 18 months, with a maximum of 5 years for the very large balances.  In addition, we agreed to a DOJ proposal to allow ROW players to submit petitions to the DOJ for compensation as well, and agreed both to reimburse DOJ for those players and to compensate those players for any amounts DOJ did not reimburse.

According to [finance employee’s name]‘s last report, PK has enough funds to pay the April salaries but not May.

Therefore, as an alternative to the purchase, I offered Ray Bitar to license the assets on a temporary basis, in order to relaunch the site, preserve the value of the assets and participate in an eventual auction as a bidder in the future.

Ray required DOJ’s aproval to do this. My own understanding of the situation was different : I thought that since the companies were clearly in insolvency, as a legal representative Ray should have immediately accepted this licensing offer which was the only concrete offer to preserve the jobs, the cash, and the value of the assets of the companies. Futhermore the DOJ is not the owner of the assets until it decides (if it ever decides) to forfeit them.

But Ray stayed on its position that DOJ’s aproval was necessary.

So we made the offer to DOJ but despite our best efforts, and with no surprise on my side, DOJ was unmoved and, on 20 April 2012, reaffirmed that its decision was final, that no licensing agreement of any kind would be accepted by them, and that our negotiations were ended.

I met Ray last friday and suggested him to place the companies into insolvency in each of the countries where they are (my understanding of the situation is that he legally should), and inform the staff that he can no longer guarantee their jobs.

Considering he has always required US DOJ’s aproval before taking any decision for the last 7 months I have been observing him, I don’t know if he has or if he will.

But on my side, I am unwilling to allow 7 months of effort to go to waste, to see 200 employees lose their jobs and to witness former FTP players around the world go unpaid.

For that reason, I have decided to devote a significant portion of the funds that I was planning to use for the acquisition of the FTP assets instead to launch my own company, under the auspices of Game Cubed, the company I have created in Ireland.  I will do this only if I can attract ALL OF the Pocket Kings KEY STAFF to join me.  With your help and know-how, we will launch a new website that will be best of breed in 6-7 months.

I know that any such step requires a leap of faith, so here is my offer:  as of May 1, I will hire the entire Pocket Kings key staff – every single one of you – at your current salaries and with your accumulated benefits intact.  I also will include stock options in the new company, so that weall will share in what I believe to be the exciting upside this opportunity represents.

We will write a new poker software platform based on your knowledge and relaunch using a new brand, with an offer to former FTP ROW players that will allow them to recover their lost balances if they come to our new site, just as we had planned in our agreement with DOJ.

I have the money to make this happen and am working with the Alderney licensing authorities on obtaining a license and getting their help on the repayment plan.

I am also negotiating with Poker Strategy to resurrect an affiliate arrangement similar to that which I was negotiating with FTP.

In order to make this work, I need commitments from you all very quickly.  I am sorry to put this pressure on you, but timing is critical if this is to work.  I need to know whether I have sufficient critical mass to move forward no later than the end of THIS WEEK.

If I do, I will schedule a meeting in Paris with the top 5-10 key peopleat the end of this week. We will take care of your travel and accomodation.

I look forward to partnering with each of you to help build the best poker site in the business.

Laurent Tapie

Directeur Général

BLT Développement”

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