View Full Version : Party IPO - Reduced Floatation

06-15-2005, 02:48 PM
There aren't enough threads on party IPO already so here's one more.

BTW has anyone found out what Empire's stock symbol is?


Partygaming, owner of online poker firm Partypoker, is to raise up to 1.1bn ($1.9bn) in its initial share offer.
The firm will seek a London stock market listing later this month in what will be the City's biggest flotation for almost four years.

Shares will be priced at between 111 pence and 127p, valuing the firm at between 4.4bn and 5.1bn.

The firm, which runs the Partypoker website, is the latest to try to tap into booming demand for online gaming.

We feel (the indicative price range) reflects the considerable success of the business to date


The cost of online poker

Trading is expected to begin in the stock on the London Stock Exchange on Monday, 27 June.

Spread betting firm IG Index said that the bid price of the shares in the unofficial grey market was 115p.

Realistic price?

The firm had been expected to be valued at as much as 5.8bn, but Partygaming denied it had cut its price after a lacklustre response from investors.

Experts have suggested investors have been wary about the firm amid concerns about the legality of online gaming in the US, where 80% of its players are based.

More than four million Britons gamble online, research says

But fellow internet gaming group Empire Online fared well at its London market debut, which coincided with Partygaming's announcement.

Shares in Empire Online - which markets mainly gambling websites - were placed at 175p, valuing the firm at $512.4m.

However, shares in the group did end the day 1.5p lower at 173.5p.

The move is also expected to propel Partygaming into the UK's leading FTSE 100 index.

The share sale is set to be the biggest in the City since technology company Dimension Data in 2000, while the size of the initial public offer is the largest since Friends Provident in 2001.

The flotation will give its 1,000 staff a 5.6% share in the group and bring huge windfalls for its four owners.

Poker giant

Partypoker has regularly been attracting 70,000 simultaneous players at peak times, the company said.

I don't find it stressful, it's just a bit of fun

Paul, online gambler

The growing allure of online poker

Richard Segal, chief executive of Partygaming, said: "Whilst the group is already a substantial business, a listing will enhance the visibility of the group and its brands among all our stakeholders, including customers, partners and employees, at a time when Partygaming is seeking to expand internationally."

Gibraltar-based Partygaming was launched in 1997 and made a pre-tax profit of 371m last year.

It says it has a 55% share of the online poker market.

The company added that revenues jumped 93% in the first three months of the current year to $222m compared with the same period last year, while operating profits rose 81% to $128m.

06-15-2005, 03:12 PM
Another new article

http://www.reuters.co.uk/newsArticle.jhtml;jsessionid=LUM2B4KDHW5SICRBAEZSF EY?type=topNews&storyID=8801489

By Steve Slater and Alison Tudor
LONDON (Reuters) - PartyGaming, the world's biggest online poker company, said its backers will raise up to 1.14 billion pounds in a London share listing, less than expected as concerns over the legal status of online gaming persist.

Uncertainty about the legality of online gambling in the United States -- where more than 80 percent of its clients are based -- continues to overhang the offer and analysts said the pricing of the shares reflects a risk discount.

"It's a fantastic business and should have a lot of potential but it has a lot of regulatory and legal hurdles to overcome to justify some of the high valuations people have talked about," said Henk Potts, investment manager at Barclays Stockbrokers.

"There's a real question over the legality of providing a service to customers who could potentially be breaking the law in their own country," he added.

PartyGaming will sell shares at between 111 pence and 127 pence in the offer, raising between 996 million pounds and 1.139 billion pounds, including a possible over-allotment offer, it said on Wednesday.

The flotation will value the company, which operates the partypoker.com Web site, at between 4.4 billion and 5.1 billion pounds.

The company had not given any previous guidance, but sources close to the deal said syndicate analysts had forecast the IPO should value it at between 5 billion and 6.1 billion pounds.

PartyGaming is set to rank as the biggest flotation in London since technology company Dimension Data in July 2000 and will break into the FTSE 100 share index. The offer size will match the amount raised by publisher Yell as the biggest IPO since Friends Provident in July 2001.

The move underscores a dramatic global boom in online poker playing. PartyGaming, formed in 1997, now reaps a profit of almost $1,000 (550 pounds) every minute as it pulls in revenue of $100,000 every hour of the day.

The company and its hundreds of rivals act as hosts for players -- they do not take risks in the game and charge players a commission, or "rake", typically about 3 percent of the pot. Up to 70,000 people play simultaneously on PartyGaming's sites.


PartyGaming's backers will sell 897 million shares in the offer, including a possible "greenshoe" offer of 115 million shares, which would represent 22 percent of the shares on offer.

One source familiar with the deal said the size of the sale had been trimmed, with some investors clearly wary of the regulatory risk.

"Generalist fund managers have shied away from PartyGaming because of potential regulatory risk but fund managers familiar with the gambling sector were sanguine on the issue and understand that any regulation is difficult to enforce," he said.

Sources said indications of interest from fund managers familiar with the sector are high and there were substantial orders for stock placed with bankers following a meeting with the company on Tuesday.

Official trading is expected to begin on the London Stock Exchange on June 27. Dresdner Kleinwort Wasserstein is sole global coordinator for the offer.

Online poker has surged in popularity in recent years, pulling in a wider audience than traditional casino gambling, often attracting women and younger players who may not have visited casinos.

Companies hosting the sites, whose costs are relatively limited, have reaped the reward, and PartyGaming said it has an estimated 55 percent share of the online poker market.

It said its revenues were $222 million in the first quarter of this year, up 93 percent from a year earlier. Operating profit jumped 81 percent from a year earlier to $128 million.

Sources said on a discounted cash flow basis members of the banking syndicate had valued PartyGaming at $8 billion to $10 billion, and on earnings/price ratios bankers estimated PartyGaming would be worth $10 billion. At the mid-point of the indicated range it would trade on about 13.3 times 2006 earnings, a discount to listed peer Sportingbet.

PartyGaming said it would pursue an "aggressive" dividend policy, and planned to pay out $200 million for its 2005 final dividend. It said this would represent two-thirds of the full-year payout that would have been made had it been listed.

The bulk of that payout will go to the company's four founders, who will also reap a cash windfall from the offer and become paper billionaires.

Anurag Dikshit, group operations director, is the biggest shareholder with a stake worth $3.6 billion at the mid-point of the indicated range.

Other co-founders Ruth Parasol and her husband Russ de Leon have a combined stake worth about $3.6 billion, and Vikrant Bhargava, its marketing director, has a stake worth $1.2 billion.

Management and employees will also be awarded options worth 5.6 percent of the company, on average worth 2-3 years' salary for the Gibraltar-based firm's 1,100 employees.

Richard Segal, the chief executive who joined less than a year ago, will have shares and options representing about 1 percent, worth about $85 million.

London is attracting a raft of online gaming companies, mainly because of more relaxed rules in Britain compared to strict U.S. regulations.

Empire Online, which provides marketing services and drives traffic to gaming sites, made a steady debut on Wednesday after raising 123 million pounds in its listing on the junior AIM share market.

Empire's shares jumped in early trading, but by midday they had slipped back and were at 180p, 3 percent above their issue price, valuing the firm at about 520 million pounds.

Financial bookmakers indicated PartyGaming could make a damp debut, with Cantor Index expecting shares to trade at 111-116p shortly after their debut and IG Index setting a 115-123p range.

06-15-2005, 03:16 PM
Linky for Empire Online Limited (http://www.londonstockexchange.com/en-gb/pricesnews/prices/system/detailedprices.htm?ti=EOL).

How do we get shares here in America?

06-16-2005, 06:04 AM
2 questions...

1. Can shares be bought on a small scale before the Monday it is offered? (says lackluster showing form investors, so I assume yes)

2. Is this stock likely to be worthwhile?

I'm not too much into the stockmarket but I tried to persuade my parents to buy google shares last summer. My Dad said that the company was a concept only and not solid enough to be profitable, two months later it had almost trebled and I was pissed off.

Well, I believe PartyPoker will do well too, and I am not worried about the legal concerns, Party is a juggernaught that cannot simply be shut down, besides which any judge who is brought the case likely has an account /images/graemlins/smile.gif. So I figure the legality issue will bring down the initial price which is a good thing.

Perhaps I am way out of my depth.

06-16-2005, 11:45 AM
No US investment bankers are touching this because of the uncertain legal status of internet poker - it wasn't even offered to US IB's. No ADR will be issued in US.

06-16-2005, 06:01 PM
Contact your broker and have he/she contact their international trading desk to obtain shares. There will not be an ADR, but you can purchase shares on the London Exchange.

06-24-2005, 06:19 PM
How would I go about doing that? Sign up with etrade or something like that? Or ???

06-25-2005, 12:12 AM
no-you need a bonafide wire house to handle this issue for you. Contact a registed broker with a firm such as UBS, Merrill Lynch, Morgan Stanley, etc. An online discount brokerage will not be able to assist you.

06-29-2005, 12:44 PM
I just called etrade and asked about opening a new account specifically to buy prty.l They said they could do the trade 45 days after the IPO.

06-29-2005, 02:46 PM
If you're confident having a discount brokerage who will charge you for broker-assisted trades (thus, negating the "discount" feature), have at it. I used to use E*Trade myself, and have nothing against them. However, you may find that with a potentialy volatile issue such as this, you're better off finding a lower-cost live broker to babysit the issue for you and make sure it's handled properly. Since you've got 45 days, do some poking around. You may find a friend who's a broker who can hook you up.

Then again, most people aren't looking to purchase an IPO 45 days after release, because the initial swell may well have settled. It's just a risk to be aware of.

Let me know if I can help in any way. I've offered to help anyone looking to purchase over $10k in this issue through my firm.

Sticky /images/graemlins/heart.gif

06-29-2005, 05:24 PM
Scottrade is also good if you want to stay online.