PartyGaming sets London bourse on fire |
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Published
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Mon, 27 Jun 2005 13:35
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LONDON: The London Stock Exchange saw the biggest flotation ever in the last five years with casino group PartyGaming coming out with its IPO valuing its shares at 116 pence a share.
Immediately after the listing, the price surged to as much as 129 pence at one point and stabilised at 123 pence, giving the company a market value of nearly 5 billion pounds, higher than several traditional leaders like British Airways and ICI.
The offer consisted of 781.6 million existing ordinary shares, prior to the exercise of an over-allotment option of up to 115.3 million shares.
The biggest flotation was in July 2000 when Dimension Data came out with its IPO and the company was valued at 6 billion pounds.
The market value of 4.6 billion pounds ensures PartyGaming a place in the benchmark FTSE-100 index of blue-chip companies.
The money raised from the IPO, the largest in London since Yell Group Plc raised 1.2 billion pounds in July 2003, will go to the company's owners and to a trust set up for the company's 1,100 current employees and future workers. The prime beneficiary is Anurag Dikshit, 33, the group operations director and founder, who will realize 366 million pounds. He will continue to own about 31 per cent post-IPO. The others are Vikrant Bhargava, 32, marketing director who will hold 8.5 per cent, and Ruth Parasol and Russ DeLeon, a married American couple who live in Gibraltar and serve as consultants.
Established in 1997, the company has three brands -- PartyPoker, StarluckCasino and PartyBingo -- and controls more than half of the global market for online poker games, a major source of income for Internet gambling companies. The global Internet gambling market is estimated between $7 billion and $12 billion per year.
The Gibraltar-licensed company faces threats in the U.S. market as the country is planning action against online gambling. But it is not dismayed as experts have said legal action can be minimal. With over 70,000 gamers at peak times, the company reported underlying earnings of 212 million pounds in 2004.
"We are delighted to be floating PartyGaming at a price that was within our set price range, with a book that was more three-times covered, and with a high quality shareholder register," said chief executive Richard Segal. He said more than three-fourths of the shares sold have gone to U.K. institutions.
The IPO was managed by Dresdner Kleinwort Wasserstein and was more than three times subscribed by investors.
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