GSN files lawsuit against Bash Gaming after latter backs out from acquisition deal
On Wednesday, The Game Show Network reportedly sued Bash Gaming for breach of contract and other claims stemming from a failed acquisition deal. Bash Gaming was to be acquired by GSN for as high as USD160 million. The gaming company makes casino games for mobile and social platforms.
The suit that was filed in the Los Angeles Superior Court said Bash pulled out of the acquisition agreement at the last possible second on October 30. GSN claimed that it made an agreement with Bash that the latter also agreed to verbally and in principle. GSN also argued that Bash instead entered into an agreement to sell its company and its Indian subsidiary to an unnamed third-party.
GSN is a joint venture of DirectTV and Sony Corp. Bash Gaming goes under the corporate name Bitrhymes Inc. GSN filed a breach of contract and other claims against Bash Gaming, chief executive Sumit Gupta, The Raine Group and its chief executive John Salter. Raine was included in the contract as Salter by association and Raine were investment advisors for Bash. Raine is a merchant bank whose investments focused on entertainment, sports, lifestyle sectors, digital and media sectors.
GSN had wanted to own Bash Gaming for the former to expand into mobile. Bash Gaming's "Bingo Bash" was the online gaming company's bestseller.
GSN and Bash Gaming began its negotiations in early 2012. In March of this year, Bash through Raine and GSN drew up a written expression of intent that would have GSN paying Bash USD65 million in cash and USD65 million for earn out payments based on Bash's revenue. The agreement also stipulated that Bash would not be looking or commit to any deals prior to the finalization of the agreement.
After GSN went back and forth with Bash to agree on an agreeable value of the agreement, Gupta told GSN chief executive David Goldhill that it had accepted an offer from a different buyer.
The lawsuit revealed that GSN wanted to force Bash Gaming to comply with the acquisition agreement it had initially agreed with GSN. GSN is also asking for USD25,000 in damages plus other costs, and the difference of GSN's acquisition offer amount for Bash and the amount Bash received from its third party buyer.