Partygaming just bought Multipoker

[berz]

LONDON (Reuters) - Online poker operation PartyGaming said on Friday it was taking over two of its four partners and ending its relationship with a third.

Analysts said that was further bad news for Empire Online (EOL.L), the fourth partner, which PartyGaming is also in talks to buy.

PartyGaming said it had agreed to pay $14.5 million (8.3 million pounds) for Multipoker and was buying most of IntertopsPoker.

A third partner, Coral Eurobet, is due to leave PartyGaming's online poker platform, migrating its players to a new platform over the next few weeks, it added.

Players on PartyGaming's four partner sites, known as "skins", can compete with each other in the online poker room, but the loss of players from IntertopsPoker, Multipoker and Coral Eurobet leaves those of Empire Online on their own.

This represents a 40 percent reduction in the number of players, analysts said, raising the risk that Empire will lose its players as they follow the herd.

"PartyGaming is using this to further squeeze down the price it pays for Empire -- that's if it bothers at all," said Robin Chhabra at Evolution Securities.

"They're just deciding now if they're going to squeeze it and then buy it, or just kill it," he added.

PartyGaming shares were up 0.3 percent to 92 pence by 8:40 a.m., valuing the group at around 3.7 billion pounds. Empire's shares were up 1.7 percent to 89-1/2 pence.

[Sniper]

From UK Times Online...

PartyGaming, the operator of the world's biggest Poker website, has parted company with one of its four relationship websites, or "skins", and effectively bought out two of the others - as it moves to collapse its online betting network into a single system in the first half of next year.

Today's shakedown by PartyGaming comes exactly a month after the group signalled it was ending its formal financial links with skins, the websites that make money by directing gambling traffic to PartyGaming's website.

And it comes as PartyGaming considers a full-blown bid for Empire Online, the company that operates the fourth of the company's skins, Empire Poker.

As part of a series of developments that underline its determination to be central to consolidation in the sector, PartyGaming is paying $14.5 million (£8.3 million) to buy the assets, player database and intellectual property of Multipoker.com, a Scandinavia-based website with more than 255,000 registered players.

It is taking control of IntertopsPoker.com, another skin site, for the next 15 months and making the company an "affiliate" of PartyGaming so it can market its services to users of the site. It is also buying the IntertopsPoker.com player database.

But PartyGaming is ending its relationship with Coral Eurobet, the third of its skin operators, which it said had decided to leave its betting platform, WPC.

The group gave little in the way of explanation for the decision but said: "Coral Eurobet is pursuing a longer-term strategy for its poker business and has decided to leave the WPC platform. The group will co-operate with Coral Eurobet in the migration of its customers to a new poker platform in the next few weeks."

PartyGaming is thought to be prepared to pay about £400 million for Empire Online, the operator of Empire Poker, which has warned that profits would fall by 10 per cent for the full year as a result of the move to ringfence players using sites such as PartyPoker.com

Richard Segal, the chief executive of PartyGaming, said: "PartyGaming's business strategy is clear and is being implemented as planned. We now look forward to the launch of the Party-branded integrated platform in the first half of 2006 when we will expand the number of games available to our customers, who will be able to use one account and a shared purse."

Shares in PartyGaming gained 1.25p to 93p after the group had detailed the changes.

After plunging in value since its blowout float in June, PartyGaming shares have begun to recover from their low-point below 75p.

Worth about £4.6 billion at flotation, today's share price values PartyGaming at just over £3.67 billion.

[Sniper]

The official Party Press Release (http://www.partygaming.com/images/111105_skins.pdf)