Sportingbet, Empire end takeover talks

By mutual agreement, Sportingbet has ended its discussions with online poker and casino promoter Empire Online Ltd. due to concerns raised over its customer base.

Sportingbet, owners of Paradise Poker, launched a 790 million pound purchase bid for the marketing company at the beginning of this month. It reportedly ended the talks as a result of market speculation that Empire Online's status as a promoter and 'poker skin' essentially means that the company has no real customers of its own and actually runs under the auspices of its poker room clients, namely PartyGaming and 888 Holdings Plc. – two of Sportingbet's biggest industry rivals.

One industry analyst believes that Sportingbet was offering 800 million pounds to purchase a company that exercises no control over its own customers as a result of complex contractual arrangements with other gaming companies. It is thought that Empire Online nets over 65% of its total revenue from customers it refers to PartyGaming. Furthermore, the firm's own gaming site, www.empirepoker.com, is considered to be a subsidiary of PartyGaming, which technically runs the site for the company as it has no gaming platform of its own. Accordingly, industry experts agree that Empire's customer base is majority owned by PartyGaming, which also controls all of the customer information for the poker room. As such, any discussions regarding a possible takeover would need to include both firms.

Empire Online shares fell by more than 20% after news of the failed talks reached the markets and fears arose that the company was not as valuable as previously thought. Sportingbet shares also fell although they were not hit as badly.

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