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20 May 2011

PartyGaming - bwin.party digital entertainment and other gaming firms financial market update, by Greg Tingle - 17th May 2011



The recent merger between PartyGaming and Austria's bwin, which created the world's largest online gaming group, was seen as the potential catalyst for a wave of takeover activity in the gambling industry. Yep, bwin.party digital entertainment are the top dogs in the industry.

Gibraltar-based bookmaker 888 Holdings, which supplies services to Caesars Entertainment, is understood to be the likeliest bid target and it has been whispered more than once that its days of independence are numbered.

A well-above-average 8m-plus shares changed hands as they touched 36.25p on talk of a 60p a share bid from bigger rival Sportingbet before closing flat at 36p. There was also gossip that 888's management is also considering taking the company private.

Betting outfit giant Ladbrokes (1.3p easier at 148.45p) in April walked away from a 200m-plus bid for 888, the second time in four years that a deal had collapsed. 888's controlling Israeli Shaked and Ben-Yitzhak families apparently could not agree on a price. During the abortive talks, 888's chief executive Gigi Levy stepped down to "pursue other interests," a development which many said left 888 even more vulnerable to predatory interest.

Sportingbet currently has a focus on acquisition. Following the termination of its talks with Unibet, the Swedish operator, it confirmed it was interested in acquiring Australian betting operator Centrebet. Snatching Centrebet would give it 33% of the Australian online betting market.

Many of the world's leading media, financial and gaming analysts believe that bwin.party digital entertainment is the igaming company best positioned to expand into new markets as regulation of the industry continues.

bwin.party was formed from the merger of bwin Interactive Entertainment AG and PartyGaming Plc in March 2011 to create the world’s largest listed online gaming company. Incorporated and licensed in Gibraltar, the Group has over 3,100 employees across Europe, India, Israel and the US and generated pro forma revenues in 2009 of €724.1m and pro forma Clean EBITDA of €193.7m. They command leading market positions in each of our four key product verticals: online sports betting, poker, casino and bingo with some of the world’s biggest online gaming brands including bwin, PartyPoker, PartyCasino and Foxy Bingo. At the heart of their business model, a proprietary gaming software and associated platforms allow the firm to differentiate their offer from competitors that is supplemented by some of the world’s best games.

The iGaming sector is one of the world's most volatile industries, but also one with some of the greatest opportunities.

Stay tuned to the Media Man network for much more about the exciting world of online gaming and gambling.

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