PartyGaming fuels IPO talk as names new chairman

By Pete Harrison

LONDON (Reuters) - The world's biggest online poker company, PartyGaming, fuelled speculation it was nearing one of London's largest initial public offerings in five years by adding two high-profile executives to its board on Thursday.

PartyGaming said it had appointed Michael Jackson, currently chairman of Sage Group, as non-executive chairman and Brian Larcombe, former chief executive of 3i Group, as its non-executive deputy chairman.

"To me that says game on for an IPO," said analyst Robin Chhabra at Evolution Securities. "If you weren't going to list, why would you hire two city-friendly people like Michael Jackson and Brian Larcombe?"

Chief Executive Richard Segal told Reuters: "The strategic review has been completed and we are considering the conclusions of that. Our decision will be made sooner rather than later. This is a company that has always been in a hurry."

Chhabra estimated the market value of the overall company at around $10 billion, a figure backed up by other industry sources. That would make it the biggest London offering since Dimension Data floated for around 6 billion pounds in July 2000.

Further evidence that PartyGaming aims to float was seen in its announcement on Thursday that its revenue had quadrupled in 2004 to $602 million.

"There's no need for a private company like this to reveal those numbers unless they're thinking of going for an IPO," said Chhabra.

The online gaming industry has boomed in the last year, helped by better broadband access and the convenience of playing at home.

"Many a high street retailer would be very envious of our like-for-like sales growth," said Segal. "We are talking about quadrupling 2004 over 2003 in terms of top-line growth."

Other companies exposed to the industry have also boomed.

Shares in Sportingbet have nearly trebled in the last year to value the owner of the Paradise Poker site at 900 million pounds.

Other beneficiaries have included CryptoLogic, a software developer for Internet gaming which beat market forecasts on Wednesday with a 27 percent increase in first-quarter profit.

London is fast becoming the de facto listing centre for Internet gambling companies, partly because online gaming is strictly regulated in the United States but welcomed in Britain, even though most players are in the States.

Other possible listings include Cassava Enterprises, the owner of 888.com and one of the world's biggest Internet gambling groups, valued at around $1.6 billion.

http://www.reuters.co.uk - 2005-05-13 04:14:22