 PartyGaming Falls as Numis Says U.S. Settlement Is `Months Off'
PartyGaming Falls as Numis Says U.S. Settlement Is `Months Off'
By Loveday Morris
June 3 (Bloomberg) -- Partygaming Plc, the world's biggest listed Internet poker company, fell the most in a month in London trading after Numis Securities said speculation of a settlement with the U.S. Department of Justice is ``premature.''
PartyGaming dropped as much as 8.3 percent as Numis analyst Richard Carter said a deal related to the company's activities in the U.S. prior to an online-gaming ban may be ``several months off.'' The shares rose the most in seven months in London on May 30 on speculation it had reached an agreement.
Gilbralter-based PartyGaming began negotiations with the Justice Department in June last year as industry concern spread about possible legal action against companies that took bets from Americans before a 2006 law barred foreign betting-Web sites. Anxiety among acquirers and lenders about possible future legal action or costs related to past U.S. business may have hampered PartyGaming's ability to be involved in mergers or acquisitions, analysts have said.
``After extensive channel checks, we believe talk of an imminent settlement is premature,'' Carter, who has a ``buy'' recommendation on the stock, wrote in the note today. ``We continue to believe that PartyGaming shares offer compelling medium-term value, although we may see some share-price weakness over the coming days.''
PartyGaming fell as much as 25 pence to 275 pence. The shares traded at 277.5 pence at 11:28 a.m., cutting the company's market value to 1.12 billion pounds ($2.2 billion). PartyGaming spokesman John Shepherd declined to comment.
After a settlement, PartyGaming's valuation would ``materially rise'' as a ``key unknown'' is removed, Carter said. In addition, the company's shareholder base would ``dramatically widen'' and the group would be able to tap debt markets to borrow money for acquisitions, he said.  | 
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06-03-2008, 09:22 AM
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