WEB POKER CHIPS ARE DOWN
Poker firm PartyGaming has been valued at well over £4.6bn in the biggest flotation in London since the dotcom boom.
The company, which owns online brand PartyPoker, is worth more than either British Airways or Boots after investors agreed to buy 20.6% of its shares at a price of 116p.
Those shares shot up after conditional dealings began, confirming reports that investors wanted more of them than was being offered.
The flotation price was within the range of 111p to 127p indicated by the Gibraltar-based firm a fortnight ago but was more cautious than many in the City had been expecting.
Full trading is due to start on Thursday and the valuation of PartyGaming means it is almost certain to be admitted to the FTSE 100 in the index's autumn reshuffle.
But not every fund manager is enthusiastic about PartyGaming, with Barclays Capital telling its clients last week that there were "too many unanswered questions".
Concerns are strongest over the legality of online poker in the US,where PartyGaming generates 90% of its revenues.
Other threats come from intensifying competition, which could weaken margins or the potential for online poker to be a short-term fad.
The flotation of PartyGaming gives 1,000 staff in the UK, India and Gibraltar a 5.6% stake in the group and means its four owners are now paper multi-millionaires.
2005-06-12
