Online poker operator worth $9.2 billion

Wednesday, June 15, 2005 | 11:02 a.m.

PartyGaming Plc, the world's largest online poker operator, will be valued at as much as 5.08 billion pounds ($9.2 billion) when it sells stock in an initial public offering this month to capitalize on the growth of Internet gaming.

The Gibraltar-based company's founders plan to raise as much as 1.1 billion pounds by selling 20.6 percent of the shares in London for 111 pence to 127 pence each, PartyGaming said today in a statement. The middle of the price range values the company at about 25 times its 2004 net income, less than U.S. Internet stocks such as search engine Google Inc.

PartyGaming controls about 55 percent of the global online poker market, which U.K. rival Sportingbet Plc values at $1.5 billion. Internet gaming may grow an average 22 percent a year by 2008, British company Leisure & Gaming Plc predicts. PartyGaming's lower market value partly reflects investors' concern over the legality of Internet gaming in the United States, where PartyGaming makes about 90 percent of its money.

"The sustainability of the company's legal and financial position will be something shareholders will want to weigh up very carefully before they decide to become involved," said Robert Talbut, chief investment officer at Royal London Asset Management Ltd., which oversees the equivalent of $43 billion in assets.