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21.11.2005 The press releases were flying this week as both Empire Online and Party Gaming broke up their discussions on a possible acquisition (see earlier reports).
Empire Online (owner of Empire Poker)lashed out first with the announcement that it had terminated negotiations with Party Gaming (owner of Party Poker)and has started litigation connected with Party Gaming's decision to go its own way by distancing itself from its skins. It said the termination came after "protracted due diligence and continued delays in the timetable (by Party Gaming)"
The negotiations have been in progress for some weeks and are believed to have started with an all share offer for around GBP 400 million by Party Gaming. This has since been revised downwards to 60p a share, or some GBP 175 million in total. Both offers are substantially less than a reported Sportingbet bid (subsequently withdrawn) of over GBP 750 million several weeks back.
Empire said that the second offer was "at a level that cannot be recommended." The price offered was not the only change, with payment arrangements in the proposals revised to include cash elements, too.
Party Gaming spokesmen shrugged off the threat of litigation, saying that: "To the extent that any action is forthcoming, PartyGaming is highly confident of a successful outcome." and "They're clutching at straws."
Empire Online spokesmen seemed equally confident, saying: "The directors of Empire Online have explored whether legal action might be taken ... in relation to damage caused to it by the conduct of companies within the PartyGaming group in separating the poker system used by PartyGaming players from that of its skins. Having received legal advice, the directors intend to institute and vigorously pursue legal proceedings as soon as possible."
Meanwhile, Empire's founder and CEO, Noam Lanir appears to be still receptive to takeover bids. In the wake of the Party Gaming termination, the company said that it has received several "commercial strategic approaches" over the past few months and would be commencing discussions with the unidentified parties involved.
In an apparent show of strength despite its recent warning of a 10 percent slide in profits, Empire claimed its business interests unconnected with PartyGaming, including Club Dice and Noble Poker, are on track to make profits after tax of about $37 million (GBP 21.5 million).
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