Partygaming's IPO Up To Expectations
Published: Monday, June 27, 2005 Online-Casinos.com
PARTYGAMING'S IPO UP TO EXPECTATIONS
Biggest London flotation since July 2000
Reuters is first with the news that shares in online casino group PartyGaming surged on Monday after it completed the biggest London flotation in five years, with a value of GBP 4.64 billion ($8.5 billion).
The well-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.
PartyGaming priced its initial public offering at 116 pence per share, but by 0720 GMT the stock had jumped 9 percent to 126-1/2 pence, taking its value straight past that of supermarket J Sainsbury to just over 5 billion pounds.
The float sees existing shareholders sell a 20.6 percent stake in the company, which reaps a profit of almost $1,000 every minute as it pulls in revenue of $100,000 every hour of the day.
"The listing will reinforce the group's position as one of the world's leading online gaming companies and enhance the group's profile as we seek to expand internationally," Chief Executive Richard Segal said in a statement.
The pricing was just below the midpoint of PartyGaming's indicative range of 111 to 127 pence.
PartyGaming, formed in 1997, runs three main brands -- PartyPoker, StarluckCasino 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 size of the world Internet gambling market between $7 billion and $12 billion per year and say it is growing by about 20 percent per year.
The Gibraltar-licensed group has suffered a bumpy ride to market, dogged by fears that it could lose its main market as the United States looks to crack down on Internet gambling.
PartyGaming's prospectus warned that its directors risk jail if they travel to the United States, but industry experts said the threat of legal action from the Justice Department was minimal.
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, it said.
Dresdner Kleinwort Wasserstein is acting as sponsor, sole global co-ordinator and bookrunner.
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