|
UK
Casino Times
> Casino
News
27 June 2005
PartyGaming Surges On Top 5-Year
UK Float
Shares
in online casino group PartyGaming surged on Monday after it
completed the biggest London flotation in five years, taking
its market value to about 5 billion pounds ($9.1
billion).
The over-subscribed offer
values PartyGaming higher than many British household names
such as British Airways and chemicals group ICI, and is the
country's biggest flotation since Dimension Data floated for
6 billion pounds in July 2000, according to the stock
exchange.
PartyGaming priced its
initial public offering at 116 pence per share, giving a
market value of 4.6 billion pounds and guaranteeing a place
in the FTSE-100 index of blue-chip UK companies.
The stock traded as high
as 132-1/2p before closing 11 percent higher at
129p.
Existing shareholders sold
a 20.6 percent stake in the offering, which raised no money
for the company itself.
Major beneficiaries
include Anurag Dikshit, the group's 34-year-old founder and
operations director, who reduced his stake from around 40
percent to 32 percent, as well as other senior managers and
staff.
Chief Executive Richard
Segal told Reuters the group would target Europe and
Australia as its main areas for growth, with Asia a
"medium-plus-term" target.
"The reason why we're
poker focused is that the group has had extraordinary
success there. As a result of that, our other products,
casino and bingo, have been to a degree neglected," he said
in a telephone interview. We will now be driving those
businesses hard going forward, and at the same time we have
got plans to introduce new products starting next year,"
added Segal, himself a keen poker player.
The pricing was just below
the midpoint of PartyGaming's indicative range of 111 pence
to 127 pence, and according to Segal the offer was more than
three-times covered.
PartyGaming, formed in
1997, runs three main brands - Party
Poker, Starluck
Casino and PartyBingo - and now has more than half the
global online poker market.
Poker has become a big
money-spinner for Internet gambling companies, which
estimate the world Internet gambling market between $7
billion and $12 billion per year and with 20 percent annual
growth.
The Gibraltar-licensed
group has endured a bumpy ride to flotation, dogged by fears
that it could lose its main market as the United States
seeks to crack down on Internet gambling.
PartyGaming's prospectus
warned its directors risk jail if they travel to the United
States, but industry analysts said the threat of legal
action from the Justice Department was minimal.
"We had a marketing
director there a couple of weeks ago, and it is not going to
restrict my travel to the U.S.," said Segal.
Analyst Greg Feehely at
Altium Securities said there was minimal risk that online
gambling would be banned.
"We've seen some
anti-measure introduced every year for the past six years,
not one of which has been a success," he said.
But Henk Potts, investment
manager at Barclays Stockbrokers, called the risk
"considerable."
"There will always be this
black cloud hanging over them when more than 80 percent of
their customers are potentially breaking the law by using
their services," he added.
Analysts said that
PartyGaming was trading at around 13 times earnings, a
significant discount to rival Sportingbet, which trades on a
2006 PE ratio of 19.5, reflecting some of the risks it
faces.
Founder Dikshit is set to
gain around $720 million from the flotation, while
co-founder Vikrant Bhargava, 32, PartyGaming's marketing
director is set to earn around $200 million.
Two other major
shareholders, former porn entrepreneur Ruth Parasol and her
husband Russ de Leon, will net around $370 million
each.
The offer consists of
781.6 million existing PartyGaming ordinary shares, prior to
the exercise of an over-allotment option of up to 115.3
million shares.
Related pages:
William
Hill Poker Room
Poker
Tycoons Face Jail Threat
US
Gambling Laws Threaten £5.5bn
Float
UK
Poker Firm Set For Listing
Also see:
UK
Online Casinos
Reviews of the leading, approved UK online casinos. Includes
details of the free money welcome bonuses offered to new
players by the online casinos.
Online
Casinos Guide
New to online casinos? We take you through the process in a
friendly, easy-going way.
CasinoTimes.co.uk
is updated every day with the latest online casino and
gambling news.
Click
Here
to bookmark us and check us out daily!
Return
to UK Casino News index
|
