Pressure Grows To Cut Party Gaming Price Again
Advisers for the flotation of PartyGaming are in line for a fees bonanza of almost £50 million as pressure grows on the online poker company to cut its offer price again.
The share sale, the biggest on the London stock market for years, is likely to net Party Gaming's four co-founders, including former online porn entrepreneur Ruth Parasol, about £930 million.
But investors are concerned about PartyGaming's growth prospects and the disputed legality of online gaming in the US, where the bulk of PartyGaming's revenues comes from. This weekend spread-betting firm IG Index quoted a price range of 105p-113p, below the indicated mid-market price of 119p at which PartyGaming would be valued at £4.8 billion - enough to propel it into the FTSE 100 index.
The bulk of advisers' fees will go to banks led by Dresdner Kleinwort Wasserstein selling shares to institutional investors. Second-tier banks involved include Italy's Mediobanca and Sweden's Enskilda.
The maximum underwriting fee paid to the banks is £35 million - or a relatively modest 3.8 per cent of the offer size. Other legal and brokers' fees will total £11 million.
