Party Gaming Deals Its Hand To Play For Market

Party Gaming, the Gibraltar-based owner of the world's biggest online poker site, yesterday moved a step closer to a £5 billion - £6 billion London flotation with the appointment of two high-profile directors.

The company, which owns Party Poker, named Michael Jackson, chairman of software group Sage as its new chairman, and Brian Larcombe, the former 3i boss as deputy chairman. Both positions are non-executive.

It added that both revenues and underlying earnings had quadrupled last year as the craze for online poker took off. Revenues reached $602m (£320m), with earnings before interest, tax, depreciation and amortisation hitting $391m.

PartyPoker.com is bigger than all the other poker sites put together, accommodating 70,000 players at peak times, playing on 8,000 virtual tables, with the minimum stake 25 US cents.

Richard Segal, chief executive, said the business had completed its strategic review and was now working with adviser Dresdner Kleinwort Wasserstein to decide on its options.

Previous joint-adviser Investec is no longer involved, but denied market talk that this was because it had found something wrong with the business. David Currie, head of corporate finance at Investec, said its mandate simply came to an end: "We certainly did not find any silver bullet that caused us to walk away."

Mr Segal declined to say whether a London float, which would send the company straight into the FTSE 100, was the preferred option. However, many in the City are already betting on a float. Robin Chhabra, an analyst at Evolution Beeson Gregory said the appointments indicated it was "game on for an IPO". He believed the business, which has little debt, could be valued at $10billion.

Any float would generate huge windfalls for PartyGaming's four owners - two American and two Indian entrepreneurs.

The business was founded in 1997 by American lawyer Ruth Parasol, who made her first fortune from pornographic telephone chat lines and websites. She is married to co-owner Russ DeLeon.

The biggest individual shareholder, however, is Anurag Dikshit, the computer whizz, who devised the software for PartyPoker. The other shareholder is Vikrant Bhargava, marketing director. Mr Segal, 42, declined to say how much the four may sell in any float.

Most of the players on PartyPoker are Americans, with less than 5pc from the UK. Mr Segal said: "The growth's coming because you've got celebrities like Brad Pitt and Ben Affleck playing, broadband internet and now poker on TV. We've also had a couple of big wins in big tournaments for online players."

He cited Mike Gracz, ''a Polish guy living in America in his early 20s who walked away with $1.5m''.

He denied that sitting up all night playing online poker was a bit sad.

"People can play when they want, they don't have to dress up and they don't have to go to a land-based casino which can be intimidating," he said. He added PartyPoker was for "the mass market, not high-rollers."