PartyGaming in Empire takeover talks |
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Published
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Thu, 03 Nov 2005 14:35
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The world's largest online poker operator, PartyGaming PLC is said to be in takeover talks with rival and partner Empire Online.
PartyGaming said that it was in "preliminary, non-binding approach to Empire." Empire is going through tough times even as PartyGaming's stock soared in the backdrop of a 32 percent rise in quarterly revenue to $220 million (£124 million). In contrast Empire was forced to acknowledge that its profits had been hit by the barring of its users from the sites run by PartyGaming.
Empire has forecast a 10 percent loss in profits as a result of this move. "Any offer proposal would depend upon, in particular, PartyGaming being satisfied as to a number of material pre-conditions, including due diligence and the prospects for Empire's business," the UK's largest online casino said in a statement.
Empire has been a sought after company in recent months and had received a £790 million offer from Sportingbet. The speculations boosted Empire shares to a record high of 287 pence. But Sportingbet withdrew from the offer on September 20 and since then Empire shares have hit the bottom.
However, they were up 7.4 percent to 124 pence in early trading today. At this rate the group is valued at £365 million. One analyst was skeptical that PartyGaming would want to pay as much for its smaller rival, "Empire is just 30 or 40 marketing people," said one analyst who declined to be named was quoted as saying. "That means PartyGaming would be paying 10 million pounds per person."
In September, PartyGaming had warned that the business was flat and that this could impact revenues. But that did not happen and the firm has enough cash reserves to takeover its smaller rivals.
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Empire Online admits £790 million approach, says talks at early stage 