888.com IPO

[midas]

Cassava plans 888.com float
by Brian Cattell in London
Updated 08:59 AM EST, Sep-1-2005

Online casino operator Cassava Enterprises Ltd. has unveiled details of the long-awaited initial public offering of its popular 888.com website on the London Stock Exchange that could see the business valued at up to £700 million ($1.25 billion).
The official announcement of the initial public offering, which has been expected by the market for some time, comes amid a period of continuing growth in the Internet gambling industry.

The IPO, which Cassava said will take place by the end of September, would make it the second major online gaming company to float an operation in London following the successful market debut of PartyGaming plc in June.

However, Gibraltar-based Cassava is considerably smaller than PartyGaming, which floated at a market cap of about £4.6 billion and accounts for nearly 50% of all Internet gambling.

Nonetheless, the robust performance of its bigger rival has clearly helped Cassava decide to take the same path. PartyGaming shares opened June 27 at 116 pence before soaring 11% during their first day of trading. The company’s shares have continued to rise since then and on Thursday were trading at 156.75 pence.

Cassava has appointed HSBC Investment Bank as the as sole bookrunner, global co-ordinator and sponsor for the 888.com float.

888.com is Cassava’s largest casino operation with 20 million users registered in 150 different countries. The site’s net gaming revenue in the 6 months to the end of June was $123.7 million, compared to $83.4 million for the same period in 2004. Cassava operates other cards sites including Pacific Poker and Reef Club Casino.

If the IPO goes ahead successfully, it will generate significant rewards for the two Israeli families that are Cassava’s main owners. Avi and Aharon Shaked now hold about 70% of the company while a further 23% is held by the Ben-Yitzhak family.