Speculation surrounds US$1.4bn Empire bid

Speculation surrounds US$1.4bn Empire bid Empire Online, the Cyprus-based poker operator, has received a US$1.4bn buyout offer, sparking intense speculation over the indentity of the mystery bidder. Empire Online (EOL) confirmed it had commenced discussions with the unnamed party, but said talks were at a very early stage. “There can be no guarantee that an offer will be made for the Company at 270p per share or at all,” it said. But industry and media speculation is rife over what would be the largest deal in egaming history. And the two largest egaming firms have emerged as potential rival bidders. The size of the bid rules out most listed egaming firms, with only Sportingbet and PartyGaming appearing to have enough firepower to raise the US$1.4bn needed. There is also the possibility of privately owned PokerStars or 888 Holdings, which recently announced its intention to IPO, mounting a bid for Empire. But PartyGaming remains the most likely candidate, and the offer could potentially start a bidding war for EOL. One source said even if it was not the current bidder it was unlikely to let EOL be bought by a rival operator. EOL runs Empire Poker, which is believed to contribute as much as 20% of the liquidity to PartyGaming’s poker room PartyPoker. But the firm has recently made moves to reduce its dependence on PartyGaming with plans for the acquisition of rival poker site Noble Poker. And the loss of Empire Poker would be a major blow to PartyPoker's dominance of the poker sector. Analysts at Citigroup Smith Barney said earlier this year PartyGaming’s best option was to “tie Empire Online in” though acquisition. Any takeover deal would mark a sudden exit for EOL, which is one of the newest listed egaming firms. EOL only came to market in June and has already performed strongly with its shares rising 56% in value since listing.