Market Briefs - June 20-24, 2005

PartyGaming's Float Is a Huge Success

Not only was PartyGaming successful in floating on the London Stock Exchange on Monday, but the company also raised its share price by 11 percent throughout the day. After being more than three times oversubscribed, the company's shares listed at 116p each (in the middle of the target range) and soared to 129p each. The listing values the company at over US$9 billion and will easily place it in FTSE 100 Index at the next review in September. About 200 institutions, 75 percent of them British, purchased shares at the float price of 116p. PartyGaming's advisers, investment bank Dresdner Kleinwort Wasserstein, say they will exercise an over-allotment option to raise the amount of shares sold in the offer from 20.6 percent to 23.7 percent.

Tattersall's Is Hot Ticket ahead of Float

Australian gaming company Tattersall's closed its public offer of shares five days early on June 24 due to overwhelming demand. Of the 700 million shares on issue, only 100 million were part of the public offer with an application price of A$2.90, which would value the company at $2 billion. The remaining 600 million shares were allocated to the beneficiaries of the will of Tattersall's founder George Adams and to Tattersall's staff. Spread betting firm IG says its gray markets have seen shares in the company rise as high as $3.88, which would value the company at $2.7 billion.

FirePay's Operator Floats on the AIM

Fireone Group (FPA.L), owner of the FirePay online payment processor system, floated on the Alternative Investment Market of the London Stock Exchange on June 2 with a market capitalization of £120.5 million. A company spokesperson said the purpose of the float was to improve the company's profile across Europe.

Gaming VC Blames Poor Marketing for Letdown

Gaming VC Holdings S.A. (GVCq.L) reports in its trading update for the first six months of 2005 that slumping second-quarter revenues have led to the lowering of estimated half-year revenues to 21 million euro. The company attributes the poor performance to insufficient marketing and has consequently initiated the first in a series of new marketing programs. The group says it will be able to pay the forecasted interim dividend of 21p per share. Its share price fell by 20 percent following the update.

Gaming Corp Reports Growth

In a trading update released this week, Gaming Corporation Plc (GMC.L) says Gambling.com, a recent acquisition, exceeded expectations by generating net income of £105,000 in May, its first month as a subsidiary. Gaming Corp. also says its recently launched gaming site on the Orange mobile platform has already gained over a thousand players in its first few weeks of operation. Additionally, the group reports that the number of unique visitors at Casino.co.uk, another gaming portal acquisition, grew from 3 million in March 2005 to 4 million in May. Finally, the company announced the acquisition of its largest affiliate partner, Irish online casino casino.ie, for £60,000 in cash.

OPAP Placement to Proceed on Schedule

Greek newspapers reported on June 21 that OPAP, the country's lottery provider, might have to postpone its public shares placement to September because it wasn't clear whether Greek football teams would participate in betting game Pame Stihima. The country's Minister of Finance stated on the 23rd, however, that the placement will proceed as scheduled with a placement date of July 17 at the latest.

Coral is UK's Largest Independent Company

According to the Sunday Times KPMG Top Track 100, an annual list that ranks Britain's biggest unquoted companies by sales, betting company Coral Eurobet is the country's biggest private company, with turnover that doubled in the last year to £5.4 billion. Coral also finished in seventh place among private companies with the biggest profits.

Reports Released

Private firm Betfair, the world's largest betting exchange, has revealed its financial figures for the year ended April 30, 2005. Compared to the same period over the previous year, revenue rose 61 percent from £66.7 million to £107.1 million, while operating profit rose 87 percent from £11.9 million to £22.3 million. Betfair now boasts over 95,000 active monthly users who place more than 3 million bets each day. Its international user base has grown by 57 percent to 16,000 and now accounts for 23 percent of revenues.

The company has reportedly begun reviewing potential advisers to flotation on the London Stock Exchange, possibly by early 2006. Goldman Sachs, Morgan Stanley and UBS are said to have already pitched offers to the company, but the company may be reluctant to make any important decisions until after the British Treasury publishes its review of betting exchange taxation. If the Treasury demands a tax rate that is too high, Betfair could easily relocate to another location, such as Malta, where it recently received a license to operate. A flotation would probably value the business between £700 million and £800 million.