PartyGaming gambles on float by end June-sources - Sunday 12th of June 2005

The world's biggest online poker company, PartyGaming, aims to price its flotation on the London Stock Exchange by June 27, market sources said on Wednesday.PartyGaming is tentatively planning to list about 800 million ordinary shares -- around 20 percent of its capitalisation -- plus an additional tranche known as a greenshoe of about 15 percent depending on demand.Analysts estimate the listing could value PartyGaming, which operates the PartyPoker website, at about $10 billion (5.5 billion pounds), and they expect the stock to qualify for inclusion in blue-chip indexes compiled by FTSE and MSCI.The last company to raise an equivalent sum in London was Friends Provident in July 2001, according to financial data providers Dealogic.

Further proof of the boom in Internet poker and London's position as the listing centre for the industry was provided on Wednesday by Empire Online, which said it plans to list on London's junior AIM share market on June 15 -- putting its ante down just before PartyGaming arrives.Empire Online, which provides marketing services and drives traffic to online gambling sites, declined to say how much it planned to raise, but estimates have suggested the company could be worth about $1 billion.Online poker has expanded rapidly in recent years, appealing to a wider audience than traditional casino gambling and helped by better broadband access and the convenience of playing at home. The boom has fuelled revenue growth at the companies hosting the sites, whose cost base is relatively limited.PARTYGAMING OWNERS SELL DOWNStock in PartGaming will be sold by its founding shareholders Crystal Ventures, Coral Ventures, Russell De Leon, Ruth Parasol and management.

These shareholders have agreed not to sell any more stock for 12 months in order to help stabilise the share price in the aftermath of the flotation."The shareholders are simply diversifying their holding but their interests coincide with those of the company," said one of the market sources."PartyGaming will use the listing to gain better access to capital markets, strengthen visibility and promote its brand."Management plans to hit the road to promote the company's shares to institutional investors between June 14 and June 24.Broker Dresdner Kleinwort Wasserstein will be the coordinator and sole bookrunner for the deal.Earlier this month, PartyGaming fuelled speculation it would list when it appointed high-profile executives to its board and said it had finished a strategic review and was now considering its options with Dresdner Kleinwort Wasserstein.

PartyGaming was not available to comment.London's position as the hub for Internet gambling companies is partly because of strict U.S. regulations in contrast to Britain, even though most players are in the United States.One source has said this deal will enable Dresdner to establish itself as one of the leading advisers in the online gaming industry. It handled last year's expansion into online poker by London-listed Sportingbet, when the company bought the Paradise Poker site.Another online casino, 888.com, is also expected to list in London later this year. It said in March it had appointed Credit Suisse First Boston to prepare for a float, which is expected to value it at about $1.6 billion.A report earlier this year by Edison Investment Research and Durlacher estimated online gambling revenue -- effectively the amount lost by gamblers -- exceeded $8 billion in 2004, up 37 percent from a year earlier.

www.reuters.co.uk

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