For months now - since Party Gaming's IPO in June - there has been
industry speculation that the world's biggest online poker site will
make acquisition moves on what was at one time one of it's greatest
player magnets - Empire Poker. This week Empire revitalized the conversation
by confirming that PG had made a "preliminary approach".
In the wake of the announcement, UK press reports have suggested that
PartyGaming could offer up to GBP 400 million for Noam Lanir's Empire...but
several leading analysts are skeptical.
One specialist is reported to have said that he was confident that
any offer price would be considerably lower than the rumored GBP400
million figure, pointing to the fact that Sportingbet had already
reversed out of a possible purchase.
The Empire announcement referred to "....the entirety of
its shares to the London Stock Exchange" suggesting a
complete acquisition, but the issue was clouded by a PartyGaming statement
that: “There can be no certainty that any agreement will
be reached”. The PartyGaming spokesman said: "Any
offer proposal would depend upon, in particular, PartyGaming being
satisfied as to a number of material pre-conditions, including due
diligence and the prospects for Empire's business."
The offer for Empire comes after PartyGaming split away from its affiliate
'skins' with a dedicated operating poker platform purely aimed at
players on PartyPoker.com on October 10, in effect ring-fencing its
existing player base from the platform it previously shared with EmpirePoker,
Intertops, Coral Eurobet and Multipoker.
Empire subsequently issued a profit warning on October 18, announcing
that its growth would be 10 percent below original forecasts as a
result of PartyGaming’s platform switch. Industry observers
opined that a takeover would be a major move in the ongoing consolidation
of the industry
But news of the approach was enough to send shares in Empire Online
up more than 9 percent higher in early dealing towards the end of
the week - adding GBP 25 million to a market capitalization that now
stands in excess of GBP 365 million.