Market Briefs - Aug. 1-5

Cassava Owners Could Net £35 Million Through Float

The London Times estimates that that the owners of Gibraltar-based Cassava Enterprises-- brothers Avi and Aaron Shaked, and another pair of brothers Shai and Ron Ben Yitzhak-- could make about £35 million if they do go ahead with floating the company on the London Stock Exchange. A trust for the Shakeds owns about 70 percent of Cassava, operator of 888.com (Casino On Net) while a trust for the Ben Yitzhaks owns about 20 percent. The remaining 20 percent is owned by employees. The IPO is expected to value the company at about £850 million.

Sportingbet Makes Acquisition and Settles Legal Dispute in Aus

Sportingbet Plc (SBT.L) has entered into an agreement to acquire Antigua-based ISC Entertainment Inc., a company that owns and provides marketing services for certain U.S.-facing sports betting and gaming Web sites, including MySportsbook.com and WorldwideGamble.com. ISC's risk management, customer services and back-office functions have been carried out by Sportingbet under a white-label agreement since 2002. The deal's initial consideration of US$33 million will be satisfied by a payment of $16.5 million in cash from Sportingbet's resources and the issue of 2,745,158 ordinary shares valued at $16.5 million. Deferred cash consideration of about $6 million will become payable in three years if the ISC business generates cumulative incremental profits over $22.6 million. ISC generated $90 million in profit for the year ended June 30, 2005, and its operating profit amounted to $6.7 million after its payment of royalties to Sportingbet. The board of Sportingbet expects operating profit before goodwill amortization for the year ended July 31, 2005 to be about $107 million.

Sportingbet Australia has recovered a sum of US$2.05 million that it paid through a lost court case in 2003 involving a gambler who acquired his gaming funds illegally from his employer. Sportingbet appealed the ruling, and was recently able to reach an agreement settlement whereby the employer will not only return the funds to Sportingbet, but also drop another pending case and pay a large portion of the legal expenses

ISWI Receives $40 million Through Private Placement

Interactive Systems Worldwide Inc (ISWI), owner of the SportXction play-by-play betting platform, announced that a number of current and new institutional investors have participated in a private placement of US$40 million in the company's Series C Convertible Preferred Stock at a conversion price of $3.75 per share. The shares are convertible into an aggregate of 1,066,667 shares of Common Stock, and shareholders are entitled to receive a six percent annual dividend, payable in cash or, subject to certain conditions, shares of Common Stock at ISWI's option. ISWI President Bernard Albanese stated, "This financing increases the company's current cash and liquid resources to over $7 million and strengthens our balance sheet considerably." He also added that the transaction provides his ISWI with additional working capital to pursue and execute multiple growth initiatives. The shares were issued at a 4.5 percent premium to yesterday's closing price.

Reports Released

British Sky Broadcasting Plc (BSY.L) has announced a 34 percent increase in profits to £804 million for the year ended June 30th, 2005. The company generated over £4 billion in revenues during the year. SkyBet, the company's betting division brought in 261 million in turnover over the year, an improvement of 37 percent over the previous year. Gross win also rose by 56 percent to £236 million. Over 80 percent of the of betting with SkyBet comes from television betting, while the remaining 20 percent comes from telephone betting. BSkyB's director of betting and gaming, Richard Flint, stated, "We are matching turnover increases in the traditional betting industry, and doing it without the benefit of fixed-odds betting terminals, which have been a lifeline for bricks and mortar businesses. In addition, we are achieving better margins, of around 14 percent, than other TV sports betting operators, because our customers aren't shopping around. They just want a bet as part of their entertainment, and we're giving them the opportunity by offering bets on every live event possible.