PartyGaming Puts Up “For Sale” Notice??
Chief Executive Officer, Mitch Gerber has reportedly announced, that the online gambling group PartyGaming is open for approaches from Las Vegas based casinos regarding a sale.
The online news website FT.com reported that Garber, speaking in a one-to-one interview during the EIG 2007 i-Gaming conference in Barcelona, has announced the Gibraltar-based online gaming group is keen to entertain buyout offers from the major casinos in Las Vegas. PartyGaming is the parent company of Party Casino and Party Poker and also offers online Backgammon, Bingo and Sportsbetting.
At its peak, PartyGaming was the world’s largest online gambling company, valued at almost $10 billion at one stage. They were hurt badly by the UIGEA, after their Board of Directors decided it would be prudent to withdraw from the US market (which provided the majority of their customer base) late last year. The company now has a market cap of around $2.5 billion and Garber believes his company could be a viable purchase option for a major Las Vegas land-based casino looking to enter the global online betting market.
When asked if PartyGaming was already in talks with a potential buyer, Garber refused to comment. Competitor 888, themselves the target of a failed merger with Ladbrokes earlier this year, has been touted as a possible buyer. FT.com reported 888 also refused to comment on a possible merger.
PartyGaming is currently in protracted talks with the US DoJ over its activities in the US prior to their withdrawal, and industry analysts believe that any merger cannot progress until the outcome of those talks becomes clear. PartyGaming and 888 could both still be facing heavy fines from the US DoJ, if their treatment of NETeller this year is any indication. NETeller was forced to pay a $136 million fine which it paid in order to avoid being de-listed by the AIM trading index.
Nevertheless, despite its fall from previous lofty heights, PartyGaming continues to trade profitably and has been slowly recovering in an increasingly competitive market. A large casino group like Mirage or Bellagio might be interested in picking up PartyGaming on the cheap, perhaps on the gamble that Rep. Barney Frank’s IGREA bill will be ratified by Congress, effectively negating the UIGEA.
Shareholders in PartyGaming are an optimistic bunch, but many have questioned why the company’s CEO continues to exercise his options and sell off his shares. To a layman observer like this reporter, it might seem the CEO has no faith in his own company and is offloading his holdings. And now he wants to sell the whole company?
With the SP rising and falling like a blackjack player’s stack of green and red chips, PartyGaming is truly a stock for gamblers. But maybe, just maybe, “the count is good” – some large purchases have been made today around the 32p mark and perhaps the SP is on its way up.
Spoken from a representative, “The outcome of the iMEGA versus UIGEA will determine more of what will happen in the future.” “We feel it will be good news, at the present it is too hard to predict.”