German Float
German online lottery company Tipp24 AG kicked off its investor road show on Friday in Frankfurt and indicated that it could go public on the Frankfurt Stock Exchange as early as Oct. 12. The company expects its book building for the IPO to begin on or after Oct. 7 and to last for three days. Tipp 24 has an annual turnover of 154 million euros, and its listing is backed by Deutsche Bank and Morgan Stanley.
32Red Lists but Delays Fundraising
Online casino company 32Red Plc (TTR.L) floated on the Alternative Investment Market of the London Stock Exchange Friday, but sold only 0.5 percent of its equity through the public offering. Only two weeks ago the company was about to complete its road show with plans for raising £10 million through its initial public offering, but investors quickly grew apprehensive following the release of PartyGaming's declining growth figures. Rather than completely pull the float, 32Red opted to postpone the raising of funds by selling only 0.5 percent of the company at 127p to make just over £300,000. The company's CEO, Ed Ware, stated that dropping the float "obviously went through all our minds, but we had done 50-odd presentations with institutions and spent a lot of time and money on the float." He added that the listing will improve the company's credibility and give it the ability to issue shares for acquisitions. 32Red still plans to raise funds through a share offering in the near future.
Z4P Cancels Fundraising and Listing
Adverse market conditions have prompted I-gaming software and technology provider Zone4Play Inc. to postpone its plans for raising funds through an IPO on the Alternative Investment Market of the London Stock Exchange. The company is investigating the possibility of listing its shares on the AIM without issuing new shares and believes that its business and prospects should not be affected by the postponement of the offering. The company's CEO, Shimon Citron, stated, "We believe that the current market price does not properly reflect the opportunities and growth prospects of the company."
Canadian Software Firms Buy Back Shares
The boards of two Canadian I-gaming software providers announced last week that they have authorized their companies to purchase significant amounts of the issued stock.
CryptoLogic Inc (CRY.TO) intends to purchase up to 1.34 million of its issued common shares, which represents about 10 percent of the public float. The company and its directors believe that the group's common shares have been trading at prices that do not reflect the underlying value of the company, considering its earnings, positive cash flow and strong balance sheet. Three days after the announcement, analysts at Canaccord Capital upgraded their rating on CryptoLogic from "hold" to "buy."
The other company, Chartwell Technology Inc. (CWH.TO), intends to purchase up to 970,000 shares, which represents about 5 percent of the issued shares. Like CryptoLogic, Chartwell believes that recent trading prices do not accurately reflect its value.
Rumored PartyGaming-Betfair Merger
The latest acquisition rumor involving I-poker behemoth PartyGaming Plc (PRTY.L) is that the Gibraltar-based FTSE-bound group could be coveting P2P giant Betfair. The prospective buy has at least temporarily diverted the attention of Investors and analysts from weeks of speculation that Partygaming has an appetite for Internet poker group Empire Online Limited (EOL.L). While Party is clearly the darling of the I-gaming world, Betfair is certainly no slouch. The U.K.-based company has a stronghold on the person-to-person betting market and is said to be eying an LSE float of its own.
Bidding for Coral Eurobet
The three private equity owners of bingo and gaming operator Gala have offered to purchase British bookmaker Coral Eurobet from private equity firm Charterhouse. Negotiations between Charterhouse and the three groups--Candover, Cinven and Permira--are said to be in advanced stages.
Another private equity firm, CVC Capital, has expressed its interest in purchasing Coral, but its bid price has not yet been disclosed to the public. CVC was responsible for floating bookmaker William Hill Plc (WMH.L) on the London Stock Exchange in 2002.
Holding Company Acquires Interactive Apps Firm
Netb2b2 Plc (NBTTF.PK), a holding company whose self-stated goal is to "become a leading provider of Internet-based business-to-business services through the acquisition of business service providers," last week acquired interactive TV and Web design firm Fernhart New Media for an initial cash consideration of £125,000 and £375,000 in shares. Although Fernhart is most recognized for its work in developing interactive TV applications for the Sky digital platform, the company also holds licenses for a number of betting games for interactive TV and the Internet. Following the acquisition, Fernhart announced its plan to launch a race betting information portal at www.OneStopRacing.com.
Reports Released
Leisure & Gaming Plc (LNG.L), the parent company of Curacao-based online gambling operator VIP Management Services, has reported its maiden interim results for the six months ended June 30, 2005. Among the period's highlights are a 25 percent increase in gross win to US$15.6 million compared to the previous period, an 8.3 percent increase in net win margin to 10.6 percent and a 35 percent increase in net win from sports book operations. The company will introduce a new version of its operating software at the end of 2005 as well as a new casino platform, which it hopes will reduce operational costs and increase player revenues. The company says it has been reviewing a number of acquisition opportunities, focusing mostly on more companies that, like VIP, possess a combination of sports book, casino and poker businesses.
Leisure & Gaming Plc - Interim Report
As expected, Sportech Plc (SPO.L), operator of the Littlewoods and Zetters brands, reported a 3 percent decrease in profit before tax and restructuring costs to £5.2 million for the first six months of 2005. Like most other British bookmakers in the first half of 2005, Sportech's betting division suffered a decline in gross win rate due to an unusually high number of favorites winning football matches and horse races. Another thing that hurt the company is that revenue at its pools betting operations fell 15 percent during the first half. The decline in pools betting was offset by £254.3 million in turnover, which is in line with the last year, and 3 percent revenue growth in the betting business. Sportech's incoming CEO Ian Penrose last week purchased 2.5 million ordinary shares of the company at 8.25 pence, representing 0.004 percent of the issued share capital.
Sportech Plc - Interim Report