Poker firm set for £4.64bn float

The price will give the firm a value of £4.64bn ($8.46bn), making it the biggest UK market debut in four years.

The float has been controversial as the US Department of Justice has said online betting is prohibited in the US, where many Partygaming users are based.

The Gibraltar-based firm was set up in 1997 and had profits of £371m in 2004.

Windfall looms

A number of people play online together at Partypoker
The risks surrounding Partygaming are hard to price in

During the first three months of 2005 earnings growth has continued and sales almost doubled from the same period a year earlier.

The company said the money raised in the flotation would be used to fund acquisitions, develop new products and expand its business into new countries.

Founders Anurag Dikshit, husband and wife Ruth Parasol and Russ DeLeon, and Vikrant Bhargava, are in line for windfalls, which - together with payouts to staff - could reach £1bn.

Euan Stirling, investment director of Standard Life, told the BBC that the 116p price, towards the lower end of the expected range of 115-120p, meant the firm "was looking to encourage a positive aftermarket" in the shares once trading began.

However he pointed out that the company is in an unusual situation.

"If the regulatory or legal situation changes, the taps can effectively be turned off for Partygaming (in the US). So the fast growth investors are looking for could disappear in smoke."

He said this risk was difficult to price in.

http://news.bbc.co.uk - 2005-06-27 01:57:00