Shares of the David Beckham-backed Guild Esports (GB:GILD) are soaring after the company announced its plans to agree on its potential acquisition by the U.S.-based DCB Sports. The company further stated that the acquisition is not certain and it is in discussions with other parties too. Following the news, Guild Esports shares surged 66.67% in trading. However, the stock has plunged 75% year-to-date.
Based in London, Guild Esports is a global esports company that is co-owned by David Beckham, one of Britain’s most iconic sportspersons.
Guild Esports to Go Private
If the acquisition is finalized, DCB will take over and manage the Guild brand. DCB will also provide future working capital needs for the private business and ongoing capital to ensure it operates on a stable financial foundation. However, no financial terms have been finalized yet and the deal remains contingent upon thorough due diligence.
DCB will also be responsible for further strengthening its existing partnerships with studios and creatives both within the country and internationally.
Guild Struggles with Weak Cash Reserves
Last week, Guild highlighted its weak cash reserves in an update, while announcing the results of its ongoing strategic review. The company revealed that it had a cash position of £25,000 as of July 31, against its confirmed liabilities of £1.36 million until the end of September 2024. Meanwhile, its accounts receivable stand at £1.52 million.
The company also confirmed that it is considering options to address its short-term liabilities. Meanwhile, the potential deal with DCB will involve all of Guild’s assets. The acquisition, which also includes Guild’s liabilities, will mark DCB’s first investment in esports.
Since its listing in October 2020, GILD shares have lost over 98% of their value.
