| Posted by: ian_go at November 23, 2005, 3:20 pm | | Topic: Party's still going for online gaming Forum: Winner Online |
Geoff Foster, Daily Mail
23 November 2005
IT'S not everyone's cup of tea but there were plenty of buyers around to help PartyGaming show the rest of the Footsie a clean pair of heels. It closed 7p higher at 106p on hefty turnover of 77m as the market heaved a huge sigh of relief that it has terminated acrimonious bid talks with Empire Online.
Dealers are also super confident that it will fend off a legal move by Empire's aggrieved boss Noam Lanir for alleged breach of contract.
Broker Evolution's short-term target price is 110p. It believes Party is fundamentally cheap and growth in global online gaming will be strong for many years given that less than 5% of global gambling takes place online currently. Party is the number one in the industry with more than 9m customers to market and a £290m annual cashflow.
Empire may have recovered from 66½p to close ½p dearer at 69½p, but it could only be a temporary respite. The chances of PartyGaming ever returning to the negotiating table are slim. Bears reckon the stock should now be trading nearer 50p.
However, Sportingbet (8p better at 338½p) should give the online gaming sector a boost next Wednesday when it unveils a bullish first-quarter trading update. Trading is above expectations.
Revived talk of a 155p per share cash bid from 29.8% Malaysian shareholder Genting left London Clubs International 4½p better at 141p. Genting also holds 11% of Stanley Leisure (20p up at 656½p on results) and there has been talk before that Genting could use its considerable financial clout to instigate a merger of the two companies.
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