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25 June 2005
Party Gaming Flotation 'Fully
Subscribed'
The
initial public offering for PartyGaming, the world's biggest
online poker company, has been fully subscribed, the bank
running the listing said last night, insisting that it had
'no plans' to cut the price.
Dresdner Kleinwort
Wasserstein said it was sticking to its price spectrum of
111p-127p, despite City bookmakers suggesting that the
shares may have to be discounted below the bottom of that
range.
Cantor Index was yesterday
quoting 109p-114p but will settle its grey market in
PartyGaming at the closing share price on July 1.
If pricing is agreed at
between 111p-127p, PartyGaming will raise between
£996m-£1.139bn and value it at between
£4.4bn-£5.1bn, making it the biggest online
company to float since Dimension Data in 2000. It should
automatically gain entry to the FTSE 100 index. Trading is
expected to start next Monday.
Adrian Darley at Gartmore
Investment Management believes PartyGaming should be seen as
a normal business, despite its 'dotcom' connotations. He
said: "PartyGaming is profitable and offers a significant
dividend yield. Despite being involved in internet it is a
normal business. There are risks attached which will make it
incredibly attractive to some investors and put more
conservative fund managers off the stock."
Getting the PartyGaming
flotation away will be a feather in the cap for Deutsche
Kleinwort Wasserstein, which is leading a group of
underwriting banks - Bayerische Hypo-und Vereinsbank,
Calyon, Commerzbank, Enskilda Securities, ING and
Mediobanca-Banca di Credito Finanziario.
Last week it emerged that
DKW and the seven other European banks handling the float
could scoop an estimated £54m in fees. The float has
been boycotted by American investment banks on the grounds
that internet gambling is illegal in the US.
The selling shareholders -
the company is raising no new money through the flotation -
have agreed an underwriting scale that gives the banks a
higher fee the better they do with the issue. The main
sellers are founders Anurag Dikshit and Ruth Parasol, her
husband Russ DeLeon and marketing director Vikrant Bhargava.
Others are Nitin Jain and Bonita Ventures.
The underwriting banks
will receive 2.5% basic commission but can earn a further
'non-discretionary incentive fee' of up to 0.8% if certain
'criteria as to valuation, timing and after-market
performance' are met. There is also a 'discretionary
incentive fee' of 0.5% that can be paid by the sellers if
they so decide.
That takes the potential
maximum underwriting fee up to 3.8% of the issue. With a
minimum of 782m shares being offered, the underwriters
should make £37.7m if they hit the top end of their
targets. They would pick a further £5.6m if the whole
of the over-allotment option of 115m shares is also
successfully got away.
Related pages:
Pressure
Grows To Cut Party Gaming Price Again
Also see:
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