Everest Poker taken over by Mangas Gaming

As part of the transaction, GigaMedia’s Everest Poker which was the official “felt” sponsor of the World Series of Poker, will join Mangas Gaming as its primary poker site.

News of the deal sent shares of GigaMedia up 9.3% to $4.12. Even with the big gains, GigaMedia’s stock is down 14% over the past month and 33% in 2009.

The companies said the 60% stake will be set at the fair market value of the business as of early 2012. Mangas agreed to make a $100 million up-front cash payment at closing and a final earn-out payment after the 2012 valuation.

GigaMedia will keep its 40% stake in the business but have an option to sell all or part of it to Mangas beginning in 2013. However, Mangas, which is the leading French sports betting and online gaming group, will have a call option to acquire the remaining stake held by GigaMedia beginning in 2015.

The companies expect the deal to close in the first quarter of 2010 when GigaMedia said it expects to book a “substantial” one-time gain on the sale.

The acquisition will bolster Mangas Gaming’s gambling portfolio, which includes BetClic, Expekt and Bet-atHome and has four million registered users in 25 countries.

"By partnering with Mangas, we can realize the full value of our poker and casino software business and share the enormous upside of this powerful combination in the large European community,” GigaMedia CEO Arthur Wang said in a statement. "This strategic alliance will create an online gambling powerhouse in Europe with top poker, sports betting and casino offerings.”

Source: www.foxbusiness.com