PartyGaming, formerly known as iGlobalMedia, has retained two investment banks in the UK fuelling widespread speculation it is pursuing a US$6bn listing on the London Stock Exchange.
Dresdner Kleinwort Wasserstein and Investec have been formally retained to undertake a review of the firm’s strategic options as it looks to build on the massive success of its Party Poker subsidiary.
PartyGaming has so far denied plans it is looking at an IPO, and its chief executive said it was looking at various options.
“We look forward to working with the teams at DrKW and Investec in taking the Group to the next stage of its development,” Richard Segal, chief executive of PartyGaming, said.
However, although the firm is believed to also be considering securing debt financing, sources have confirmed PartyGaming’s existing shareholders are believed to be keen to go public.
One source informed eGaming Review the firm’s majority shareholder, Ruth Parasol, is keen to take advantage of the current investor appetite for egaming firms.
“There is a thought within that company that initial investors want to take their pay day now, rather than wait for a larger exit in five years’ time,” he said.
Pre-tax profits for the 2005 financial year are expected to be in excess of US$500m at the firm, and its market capitalisation could be as high as U$6bn.
This would place the firm in the select FTSE 100 and would give PartyGaming a higher market capitalisation than William Hill, which operates almost 2,000 high-street stores.
And the appointment of stock market-friendly PR firm Financial Dynamics is also viewed by analysts as a clear sign of the firms intentions.
Vikrant Bhargava, PartyGaming’s director of marketing, who has run the Party Poker website since its inception told eGaming Review last year the firm wanted to boost its market share through acquisition.
“We have 60% of the industry, but we could be 95% of the industry,” Bhargava said, “and with an influx of capital you can go out and acquire everyone else.
“It could be in this industry, or it could be people in other related businesses, but I see that as definitely a possibility,” he added.
Industry rumours have previously linked PartyGaming to planning a potential merger with Cassava Enterprises, but this was strongly denied by Cassava representatives.
source : egaming review magazine
