David Beckham-backed Guild Esports (LSE: GILD) has announced the signing of a letter of intent (LOI) with DCB Sports LLC to dispose of all Guild assets and liabilities.
Guild Esports was listed at 8p in 2020 in the midst of the pandemic and a spike in interest in virtual gaming. However, the buzz has died down as gamers returned to the real world and shares now trade at just 0.2p.
Last week, Guild Esports shares plunged after announcing cash constraints, leaving them with just £25,000 in cash and relatively large receivables and liabilities.
With the company on the ropes financially, management has opted to throw in the towel and dispose of all its assets effectively ending its time as a London-listed company. The potential amount has not been disclosed.
DCB Sports intends to maintain and elevate the Guild brand and has pledged to provide robust financial backing, including backing up future working capital needs and supplying ongoing capital.
DCB Sports’ ventures span from a stake in Ice Cube’s Big3 basketball league to co-ownership of The Bay Golf Club alongside NBA stars Steph Curry and Klay Thompson. With investments in Venezia FC, the National Thoroughbred League, and TMRW Sports (co-founded by Tiger Woods and Rory McIlroy), DCB Sports has demonstrated a knack for identifying unique opportunities in the sports and entertainment sectors.
The deal remains subject to the successful negotiation of a definitive legal agreement and the completion of due diligence. Furthermore, Guild’s directors have made it clear that they are still in discussions with other potential suitors, leaving the door open for a rival bid for the assets
Guild’s shares were 66% higher at the time of writing.