British newspaper The Sunday Times reports that Isle of Man-based Pokerstars, operator of the world's second most popular online poker room, is preparing to float on the London Stock Exchange with an anticipated value of more than US$2 billion (£1.1 billion) before the end of 2006.
The company in January contracted investment bank NM Rothschild, prompting much speculation that the owners of PokerStars wanted to sell the business, but the owners are now understood to have been meeting with investment banks such as HSBC and Dresdner Kleinwort Wasserstein to list the company on the public market.
One of The Sunday Time's inside sources noted that Pokerstars has had a number of meetings with banks over the possibility of advising on a float. He stated, "It's early days, but this is a live situation. It's up and running."
The firm is understood to be engaged in discussions with Dresdner Kleinwort Wasserstein, which served as adviser to PartyGaming's London Stock Exchange float in June of 2005, and HSBC, which served as adviser to 888 Holdings' London Stock Exchange float in September 2005, as well as others. It is not clear what role, if any, NM Rothschild would provide in a float.
It is thought that PokerStars, the world's second largest online poker room, has annual profits of between $150 and $200 million, and that it would list at a profit multiple of 10-13 and reach a value of around $2 billion. PartyGaming, the biggest rival of PokerStars, trades at an expected profit multiple of about 16.5.
The founding Scheinberg family, headed by former IBM programmer Isai Scheinberg, owns 75 percent of PokerStars, while employees of the company possess the remaining 25 percent.