Empire Online receives $1.4 billion bid | business | Hindustan Times
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Empire Online receives $1.4 billion bid

The firm, which provides marketing and drives traffic to sites run by firms such as PartyGaming and 888.com, declined to name its suitor.

business Updated: Sep 02, 2005 16:37 IST
Reuters
Reuters
PTI

Internet gaming services firm Empire Online Ltd has received a 790 million pound ($1.4 billion) bid approach less than three months after coming to market, providing fresh evidence of the boom in online betting.

The firm, which provides marketing and drives traffic to sites run by firms such as PartyGaming and 888.com, declined to name its suitor. But analysts said PartyGaming was the most likely buyer.

"It would be quite synergistic (for PartyGaming)," said Robin Chhabra, an analyst at brokers Evolution Securities.

PartyGaming declined to comment.

Empire Online said on Friday the bid approach was pitched at 270-pence-a-share and was a mixture of cash and shares, but that talks were at a very early stage.

The firm's shares floated at 175p apiece in June and have rallied on the back of soaring demand for online betting.

At 0915 GMT the stock was up 5.9 per cent at 270 pence. It briefly touched a new high of 274p, signalling some investors are hoping for a higher offer.

Evolution's Chhabra thought 270p was a fair price.

"My guess is that investors should accept the offer because I don't think PartyGaming, if it is them, would offer much more," he said. A deal at 270p would only modestly boost PartyGaming's earnings, he added.

However, analysts at brokers Arbuthnot wrote in a recent research note that PartyGaming might be prepared to pay up to 300p a share to take over a business which is starting to grow new poker customers faster than PartyGaming itself.

ONLINE BETTING BOOM

Founded by Israeli businessman Noam Lanir in 1998, Empire Online is one of a number of firms riding a wave of demand for online casino games such as poker and roulette.

Last month, it posted an 88 percent rise in first-half pretax profit to $25.5 million.

Online money transfer services firm NETeller said on Friday it was also benefiting from the surge in Internet betting as it posted a 126 per cent rise in first-half pretax profit.

Cassava Enterprises, which runs online casino 888, said on Thursday it planned a London flotation this month which analysts think could be worth more than 700 million pounds.

PartyGaming floated its shares at 116p apiece in June and has since seen its stock rise to as high as 179-1/2p. At 0750 GMT, PartyGaming shares were up 3.6 percent at 160p.

PartyGaming is due to report interim results on Tuesday.

Empire Online also said it had appointed Andrew Burns as chief financial officer to replace Yossi Pereg, who is stepping down for personal reasons. Burns was finance director of nightclub operator Luminar Plc from 1997 to 2005.