David Beckham’s esports group is set to be taken private by a sports and entertainment group that has backed Rory McIlroy and Tiger Woods’s new indoor golf league.

Guild Esports, which fields teams in video game competitions including Fortnite and Tekken, warned last week that it was close to running out of cash and announced it was open to takeover offers.

The company confirmed on Monday morning that it had struck a deal in principle to sell all of its assets to DCB Sports, a California-based investor that specialises in “emerging sports teams and novel leagues”.

Details have yet to be hammered out, but if the takeover completes, Guild Esports will remain listed on the London Stock Exchange as a cash shell. Guild bosses are still in talks with other prospective buyers should the sale to DCB fall through.

News of the takeover talks lifted Guild shares from the record low to which they collapsed last week. The stock doubled to a ¼p in early trading on Monday.

“The board is looking to secure the long-term future of Guild Esports, both the PLC and the iconic Guild brand,” Jasmine Skee, Guild’s chief executive, said. “Our deal with DCB Sports is an important step in that direction, as DCB Sports will allow Guild’s management to deliver on its strategic aims of building a world-class gaming-led media brand.”

Among other things, DCB has invested in TMRW Sports, McIlroy and Woods’s entertainment group, as well as The Bay Golf Club, one of the teams in TGL, the upcoming golf league created by TMRW. Guild would be its first foray into esports, a booming industry in which professional gamers compete against one another for significant prize money.

• David Beckham-backed esports group battles for survival

Gary LaDrido, managing partner of DCB, said esports was the “perfect combination of sports, gaming and entertainment. We’ve long followed esports and with Guild we have found the perfect opportunity for us to enter the sector.”

Guild shocked the market last week when it said it had only £25,000 left in its bank account despite having £1.4 million of bills that needed to be paid before the end of September.

Even with Monday’s rally, the share price is still down by more than 98 per cent since the company floated on the London stock market in October 2020.

The shares started at 8p as part of that initial public offering, which valued the company at about £40 million. But Guild has struggled to convince the City, having racked up losses of £26.6 million over the past three and a half years, almost double the £14 million of revenue it has generated over that period.

Beckham was an early investor in Guild and was allowed to buy shares at a discounted price just before the company floated on the stock market. He remains one of the largest shareholders, with a stake of just over 3 per cent.

Although he has lost out on that investment, the former England football captain has made millions from an influencer agreement that requires him to post about Guild on social media and make public appearances at company events.