A video gaming company backed by David Beckham is close to agreeing a deal to be bought by a Californian investment group.
Guild Esports, which backs teams of professional video game players and enters them into tournaments,
said it had signed a letter of intent for DCB Sports to assume all its assets and liabilities.
Last week, London-based Guild issued a warning on its finances and said it was ‘exploring a range of options’ to meet its short-term costs.
Its accounts at the end of July only held £25,000, while its confirmed liabilities until the end of September totalled £1.36 million.
Guild also said last week that it was ‘reviewing the strategic direction’ of the business, including a sale of some assets to raise cash.
Jasmine Skee, chief executive of Guild Esports, said a deal with DCB would allow the company ‘to deliver on its strategic aims of building a world-class gaming-led media brand.’
However, Guild warned investors that a takeover was not guaranteed and would depend on due diligence and the parties making a ‘definitive legal agreement.’
The purchase price for Guild has not been revealed.
Headquartered in Los Angeles, DCB is a major investor in emerging sports teams and novel leagues.
It led an investor consortium to buy a team in the Big3, a 3-on-3 basketball league started by hip-hop musician Ice Cube, and has stakes in Italian Serie A football side Venezia FC and horse racing competition the National Thoroughbred League.
The firm has also invested in The Bay Golf Club, a side in the planned TGL indoor golf league whose co-founders include professional golfers Tiger Woods and Rory McIlroy.
Gary LaDrido, managing partner of DCB Sports, said: ‘We’ve long followed esports, and with Guild, we have found the perfect opportunity for us to enter the sector for the first time.
‘We look forward to working with Guild’s impressive list of clients as well as building new relationships around the world.’
Founded in 2019 as The Lords Esports, Guild became the first esports group to list on the London Stock Exchange when it went public in October 2020 with a £41.2million valuation.
Just before listing, ex-England national football team captain David Beckham took a significant minority stake in the business through his personal investment vehicle DB Ventures.
Yet Guild Esports shares have plummeted by about 99 per cent since debuting as the firm has accumulated £26.6million in losses over the past four years. They were 88.5 per cent up at 0.23p on Monday morning.
Last month, Guild reported a £1.8million pre-tax loss for the six months to March as its revenues were affected by a ‘challenging macroeconomic environment’ and a one-off tournament prize of $1million the previous year.
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Source: New York Post
