Firm proceeds with IPO despite rival’s stock plunge

Wednesday, Sept. 7, 2005 | 9:39 a.m.

888 Holdings Plc, the world's largest Internet casino operator by number of visitors, is proceeding with its plan to sell stock in an initial public offering even as shares of rival PartyGaming Plc plunged Tuesday.

888 hasn't changed its plan to sell shares, said a spokesman for the Gibraltar-based company, who declined to be identified, in a telephone interview. The company has had "very positive feedback" from investors ahead of this month's sale, he said.

Shares of PartyGaming Plc, the online operator which competes with 888 in poker gaming, fell as much as 37 percent today after the company said revenue growth is slowing, wiping about 2.4 billion pounds ($4.4 billion) from the company's market value. As of Monday, PartyGaming shares had risen 35 percent since its IPO in June, while the shares are now trading below the offering price.

PartyGaming's valuation is being used as a benchmark for 888's business, bankers said. Shareholders of 888, who plan to sell $500 million of stock in an IPO that would value the company at about $1.5 billion, may raise less now in the offering, bankers added.

Gibraltar-based PartyGaming, which makes 87 percent of its revenue in the U.S., said revenue gains are slowing as competition mounts because more operators are seeking to enter the market.

Founded in 1997, 888 operates the Casino-on-Net and PacificPoker Web sites. Casino business accounts for about two- thirds of 888's sales.