PartyGaming, 888 Holdings in merger talks

30 Oct 2006

UNITED KINGDOM – As reported by UK Guardian: "Two leading online poker and casino firms, PartyGaming and 888 Holdings, have held talks about a £1.6bn merger as the industry scrambles to replace revenues lost through the United States' crackdown on internet gambling.

"The online gambling industry has been devastated by legislation passed in Washington this month preventing banks and credit card firms processing payments for bets. Analysts reckon PartyGaming earned between 75% and 80% of its revenues from the US. The ban caused shares across the sector to collapse.

"PartyGaming, which has dropped out of the FTSE 100, has made no secret of its plans to seek a deal with rivals to bolster its business. The firm cancelled its dividend shortly after the US ban and said at the time it hoped to take advantage of slumping share prices. Its chief executive, Mitch Garber, said in a recent interview consolidation was the "most sensible way forward" and told analysts he was in talks with several companies. The Stock Exchange might force a statement today.

"The desperate state of the industry has led to a frenzied round of talks among leading players. 888 was forced to put out a statement recently denying it was behind a bid for another UK listed firm.

"…Discussions between PartyGaming and 888 are said to be at an early stage. The firms at least don't have far to go: they occupy the same office block in Gibraltar…"

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	PartyGaming, 888 Holdings in merger talks 30 Oct 2006 UNITED KINGDOM – As reported by UK Guardian: "Two leading online poker and casino firms, PartyGaming and 888 Holdings, have held talks about a £1.6bn merger as the industry scrambles to replace revenues lost through the United States' crackdown on internet gambling. "The online gambling industry has been devastated by legislation passed in Washington this month preventing banks and credit card firms processing payments for bets. Analysts reckon PartyGaming earned between 75% and 80% of its revenues from the US. The ban caused shares across the sector to collapse. "PartyGaming, which has dropped out of the FTSE 100, has made no secret of its plans to seek a deal with rivals to bolster its business. The firm cancelled its dividend shortly after the US ban and said at the time it hoped to take advantage of slumping share prices. Its chief executive, Mitch Garber, said in a recent interview consolidation was the "most sensible way forward" and told analysts he was in talks with several companies. The Stock Exchange might force a statement today. "The desperate state of the industry has led to a frenzied round of talks among leading players. 888 was forced to put out a statement recently denying it was behind a bid for another UK listed firm. "…Discussions between PartyGaming and 888 are said to be at an early stage. The firms at least don't have far to go: they occupy the same office block in Gibraltar…"