PartyGaming shares surge after flotation
The over-subscribed offer yesterday 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 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 and guaranteeing a place in the FTSE-100 index of blue-chip British companies.
The stock traded as high as 129p in early dealings and by 11.30am was up 9% at 126.5p.
Existing shareholders sold a 20.6% 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% to 32%, 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.
“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 - PartyPoker, StarluckCasino and PartyBingo - and 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 $7bn and $12bn per year and with 20% 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 US seeks to crack down on internet gambling.
PartyGaming’s prospectus warned its directors risk jail if they travel to the US, but industry analysts said that the threat of legal action from the Justice Department was minimal.
