Online Poker News » November 2005
» November 23, 2005.
Empire Poker Announces Legal Action Against Its Former Partner Party Gaming.
Online gaming company, Empire Online, which operates Empire Poker, announced legal action against their former partner, Party Gaming. The announcement was made following the collapse of a deal between the two companies that would have resulted in the acquisition of Empire Online by Party Gaming.According to the recent statement released by Empire Online, Party Gaming, operator of largest internet poker room, Party Poker, approached it with an all-stock offer valuing the company at 10% of the total value of the combined entity. The discussions ended because, according to the statement:
"Following a protracted due diligence process and continued delays in the timetable, PartyGaming has made a revised proposal that is significantly different both in terms of the price and structure and at a level that cannot be recommended."
Empire's legal action is based on perceived damage inflicted on them by Party. According to Empire, they served as a conduit for new players to join the Party Poker, which enabled Party built a large player base, while Empire received a piece of revenue its players brought in. Once Party excised Empire and other "skins" (of which Empire was one), Empire Poker's player base was substantially reduced and they have already warned analysts that their financial results will be lower than expected.
PartyGaming purchased Multi Poker, one of the other three skins, and has made Intertops Poker an affiliate, essentially absorbing that poker room, as well.
PartyGaming said the rejected bid valued Empire Online at 60p per share, but initial reports in the media said an informal all-share proposal was made last month of more than twice that. Empire Online's shares have been trading at approx. 65p this week, but their stock was as high as 288p in the last 52 weeks period.
This is not the first time talks have ended between Empire and Party Gaming. In September, Sportingbet closed talks that had it potentially bidding 270p per share for Empire Online. What's the difference in just few weeks!
