Cassava Speaks - IPO Planned for this Month

2 September 2005

Officials with Cassava Enterprises, the operator of, Casino-on-Net, Pacific Poker and a host of other gambling-related sites, have announced that the company is planning a late September float on the London Stock exchange.

The offering is intended to fund acquisitions and the hiring of staff as well as provide a partial exit for shareholders, and the financial investment community is predicting that the company could be valued at more than £700 million

It will be the first major IPO in the I-gaming space since June, when competing casino and poker operator PartyGaming went public at a value of £4.7 billion. Shares in Party, which operates the world's largest online poker room (, have increased in value by 38 percent since the float, and the company's worth has risen to £6 billion. With investor interest in I-gaming at an all-time high, now could be the perfect time for Cassava to make its move.

One thing differentiating the two Gibraltar-based poker giants is that Cassava has put more of an emphasis on its casino (non-poker) products, and the company's chief executive, John Anderson, said they are concentrating heavily on areas (such as blackjack and roulette) that they believe to have strong growth potential. Still, Cassava's Pacific Poker is the fourth largest poker room on the Internet, and that won't likely be lost upon investors drawn to the online poker craze.

Cassava has built one of the largest player bases in the I-gaming industry; it reports having more than 20 million registered accounts in more than 150 countries. The company reported pre-tax profits of $41 million (£22.5 million) for the past year--more than doubling those of the previous period ($41 million/£22.5 million). Profits before tax earnings in the first half of 2005, meanwhile, were $24.5 million. The company also said that its net gaming revenue for the first six months of 2005 was $123.7 million, compared to $83.4 million for the same period of '04.

Anderson, a former Ladbrokes exec, said the float will accomplish two things: It will give Cassava great positioning as the I-gaming industry approaches another paradigm shift, and it will increase the company's credibility among players.

"Floating will not only enhance our profile but also our credibility and the important 'trust-me' factor," Anderson said during a conference call on Thursday. "The industry has reached a stage where consolidation is going to be the name of the game over the next 18 months and we want to be there and take it forward."

In preparation for the IPO, Cassava has appointed former Ladbrokes senior lawyer Marie Stevens as its chairman and tabbed London-based HSBC as sole bookrunner, global co-coordinator and sponsor for the float.

No new shares will be sold in the offer; instead existing shareholders are expected to sell about a quarter of the company (worth roughly £175 million) to new investors.

Cassava's Israel-based founders (the Shaked family, which owns 70 percent of the business, and the Ben-Yitshak family, which owns 20 percent) are expected to net a combined £200 from the IPO.

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