888 Holdings Plc. succumbed to industry and investor pressure and announced a price cut of its upcoming floatation late last week. Having previously priced its shares at around £800 million, the company has now indicated a likely price could fall as low as £546 million. And, while no final figure has been produced by the company, they have warned that it will be no higher than £715 million.
An investment banker working at 888 sponsor HSBC revealed that the price cut was a direct response to rival PartyGaming's recent slow growth warning, which caused shares to fall significantly across the gaming industry.
However, the company maintains that a successful float on the market is not entirely dependant on the fluctuations of the online poker market, as 65% of 888 Holdings' revenue is generated by its online casino rather than its poker room, Pacific Poker.
The firm further revealed that its online casino boasted a 14% increase in revenue during the first half of this year, while Pacific Poker experienced a 226% revenue increase in that same period and did not suffer a slow down in the months immediately following (July and August), which is when PartyGaming claims to have experienced losses and observed market moderation.
888 is set to announce its final flotation price next Thursday, September 29.