Confirmation From 888: The Float Is On!

Published: Friday, September 02, 2005 Online-Casinos.com

CONFIRMATION FROM 888 CASINO - THE FLOAT IS ON

End of this (September) month a strong possibility

The intense speculation that Cassava Enterprises is to float on the London stock exchange has finally been confirmed by the company this week, with a launch date around end September 2005.

Reuters reports that Cassava Enterprises said it intends to seek a full listing on the London Stock Exchange for its online casino 888.com. The Gibraltar-based company confirmed it had appointed London-based HSBC as sole bookrunner, global co-ordinator and sponsor for the float.

The float could value the Internet casino operator at more than GBP 700 million, say informed sources. Cassava runs several online casinos, including 888.com, Pacific Poker and Reef Club Casino.

The flotation is expected to generate big windfalls for the two Israeli families that control more than 90 percent of the company.

Avi and Aharon Shaked own about 70 percent, while the Ben-Yitzhak family owns about 23 percent. The company has 20 million registered member accounts in more than 150 countries.

John Anderson, the company's chief executive, said on a conference call that the barriers to entry in the growing online gaming industry were getting higher, and that 888 Holdings would work to increase its brand recognition.

"You can't pack a laptop and start a business in one or two years," Anderson said. "The number of players is shrinking, but they are getting bigger," he said.

"Today's announcement marks an important step in our goal to become the market leader in the global online gaming entertainment industry and will enable us to increase further our brand profile, recognition and credibility. If you look at our management team it's been around since the start of this industry. It's very strong, very knowledgeable and it's the longest-standing management team of all," he said.

Just over half of the firm's revenues come from the United States where the legality of online gambling is in question. 888 has over 20 million registered member accounts in over 150 countries playing its games in 11 languages.

The company's current first-half operating profit rose by 30 percent to $25.4 million, compared with $19.7 million for the same period in 2004.

The global Internet gambling market generated $7 billion to $10 billion in revenue in 2004, according to various estimates. About 2,500 Web sites offer poker, bingo, sports betting and online-casino games. The online gambling market could be worth some $24 billion by 2009, according to investment firm Christiansen Capital Associates.

Cassava said the float would provide money for acquisitions, hiring staff and enable a partial exit for shareholders.

London has become the de facto listing centre for Internet gambling companies, partly because Britain welcomes online gaming.

Rapid industry expansion, helped by better broadband access and the convenience of playing at home, has fuelled revenue growth at the companies hosting the Web sites.