Party Gaming joins the Empire Online bid
04.09.2005The UK Telegraph reports that PartyGaming is considering a rival bid for Empire Online, the recently AIM-listed online betting firm which has received a potential GBP 791 million takeover offer from Sportingbet according to reliable sources.
Empire Online said on Friday that it had been approached by a potential bidder that was considering offering 270p per share for the company in a mixture of cash and shares. The offer, which would value the company at GBP 791 million, is subject to due diligence. This weekend the potential bidder was revealed as Sportingbet, an online gambling rival, which has a market value of GBP 1.24 billion and strong credit lines.
A rival bid from PartyGaming could lead to a bidding war for Empire Online and drive up the share price. Last week the shares rose by 6.8 percent to close at 264p.
PartyGaming executives and the company's financial advisers were understood to be evaluating options this weekend.
PartyGaming and Empire Online (Empire Poker) already have a commercial relationship - a move that analysts believe makes a deal between the two companies more likely, and one that was recommended by leading analysts not long ago.
Empire Online effectively acts as a marketing company. It operates gambling websites under its own name which draw in customers, but it uses the technology and software of betting companies to provide the actual gambling services. Its largest customer is Party Gaming, best known for its Party Poker website, the most popular online poker site in the world. PartyGaming floated in June and has a market value of GBP 6.3 billion.
Analysts say that if Sportingbet succeeds in buying Empire Online it could divert valuable customers away from PartyGaming and re-route them to its own services.
