Saturday, October 14, 2006

Excapsa Services Sells Brands to a Spinoff of... Itself??

Now here's an interesting way to reposition one's corporate, publicly-held self to shield said corporate self from the reaches of the Amerinazi legislative tentacles. Interesting, and likely illegal, according to one of Great Britain's leading financial newspapers.

On Thursday, Excapsa Software, Inc., the parent company of Excapsa Services, Game Theory Holdings and the Ultimate Bet online poker brand, sold the Excapsa Services and Game Theory Holdimgs units --- essentially, the software and development networks behind the UB name --- to a privately-held company, Malta-based Blast Off Limited. The release announcing the sale calls Blast Off Limited a "rival," but that one's open for conjecture.

The selling price was listed as $130 million dollars, of which only $10 million was paid immediately into the Excapsa coffers; the remaining $120 million is to be distributed in deferred payments to Excapsa over the next five years. However, Excapsa also announced that it was immediately pulling its listing from the London AIM (Alternative Investment Market), and distributing its current net assets --- some $47 million, to the current shareholders... as a nice parting gift. According to an Excapsa release, the sale was the "best course of action to maximize shareholder value." The release continued by stating that, "The sale represents the disposition of all operating assets of the company."

Make that "all current assets of the company," as there's that little matter of the deferred $120 million to attend to. According to the London Times Online, the deferred portion of the sale makes the divesture almost certainly illegal. Per the piece:

However, legal sources immediately claimed that the deal, a response to the impending US ban on internet gambling, was almost certainly illegal because $120 million of the price will be deferred until after the law takes effect today.

A source said that plans by Leisure & Gaming, a quoted internet gambling operator, to sell its US-facing business appeared to have foundered over the same issue. The source said: "Because of the deferred consideration this deal will open Excapsa to conspiracy and aiding-and-abetting charges charges under the new law. They would be making money out of an illegal operation."

And the deferred portion of the sale raises another question, too, one not sitting well with current shareholders. If the company's shares are being privatized through the sale to Blast Off Limited, and $47 million is being distributed to those owners, then to whom, exactly, is that additional $120 million being paid? It's probably not anyone connected with Pokershare, the company that sued Excapsa in 2005 for $100 million after its early market successes threatened parent brand Ultimate Bet's market domination; Excapsa first banned Pokershare from its network, then later terminated Pokershare's agreement altogether.

So who is Excapsa, exactly? Well, while the exact financial details aren't public knowledge, the driving poker figure behind Excapsa is widely rumored to be Russ Hamilton, the larger-than-life 1994 WSOP Main Event champion. Yes, Phil Hellmuth and Annie Duke also own pieces, and Antonio Esfandiari has a corporate toenail's worth, but Hamilton is the interesting connection. Here's one of several current 2+2 threads on the topic.

Your blogger reserves ultimate judgement --- pardon the pun, heh-heh. There's certainly no doubt that all publicly-traded gaming companies were up against a Friday deadline to make something happen, to restructure in a way that would shield them from the U.S. Justice Department. Whether or not the Excapsa path will work out, or whether it turns out to be totally legitmate, is beyond the scope of your blogger's legal expertise. Nonetheless, it's become public knowledge, so it's in play as a topic.

1 comment:

NioNio said...

Move along people, nothing to see here.