PartyGaming shares slump as sell-off by founders is shunned

Attempts by the four founders of the online gambling company PartyGaming to further enrich themselves by selling down their shareholdings partly backfired yesterday after they were forced to scale back the offering.

They had hoped to sell 8 per cent of the company but in the end only managed to dispose of 5 per cent of the holding in a poorly received share placing.

PartyGaming was the biggest faller on the FTSE 100 as other investors sold the shares. The stock fell nearly 7 per cent at one point and ended the day at 117.75p, down 3.7 per cent. The group's broker, Dresdner Kleinwort Wasserstein, was forced to scale back the sale to 200 million shares from a planned 350 million, and raised only £232m. The shares were priced at 116p each, the price at which PartyGaming floated a year ago and below the targeted range of 119-120p.

The founders were locked into their holdings until the end of the month and needed the broker's permission to sell their shares earlier. The lock-up has now been extended until the end of December and once again they would need the nod from DKW to sell earlier. When asked why the broker lifted the lock-up early, a PartyGaming spokesman said: "DKW's primary responsibility in a lock-up is to maintain an orderly market." He denied that other shareholders were unhappy. "The stock overhang has been dealt with," he said.

The placing had been teed up for Tuesday but due to a lack of investor appetite it did not go ahead then. Insiders said DKW started the placing with 350 million shares at 119-120p, then went down to 114-115p and some funds even pushed for a price as low as 110p. But the founders were not prepared to sell for less than 116p.

Anurag Dikshit offloaded 57 million shares, taking his 30.4 per cent stake in the business down to 28.95 per cent, while Vikrant Bhargava sold 67 million shares, leaving him with a 6.96 per cent holding. Ruth Parasol and her husband, Russell DeLeon, each sold 33 million shares leaving each of them with 14.87 per cent of the company. Together, the four still own 65.7 per cent of PartyGaming.

The shares had been depressed ever since Mr Dikshit and Mr Bhargava announced they would step down from the board two weeks ago, raising questions over their stakes in the business and sparking fears that a flood of shares would soon hit the market.

The official reason given for the sale was that the founders wanted to diversify their portfolios. They have to maintain a majority holding until 2010 to keep the company's favourable tax status in Gibraltar, and would have to give PartyGaming 12 months' notice if they chose to sell below.

Mr Dikshit, PartyGaming's technology guru, has stood down as group operations director but will remain as head of research, while Mr Bhargava, the marketing director, is leaving at the end of the year.

Analysts at ABN Amro said: "We believe that the founders could still reduce their shareholding by about 11 per cent without risking the loss of their favourable tax status in Gibraltar."

Suggested Topics
Sport
sportGareth Bale, Carl Froch and Kelly Gallagher also in the mix for award
News
Japan's Suntory Beverage & Food has bought GlaxoSmithKline's Lucozade and Ribena
news
News
A tongue-eating louse (not the one Mr Poli found)
newsParasitic louse appeared inside unfilleted sea bass
Life and Style
The reindeer pen at the attraction
lifeLaurence Llewelyn-Bowen's 'Magical Journey' and other winter blunderlands
PROMOTED VIDEO
News
ebooksNow available in paperback
News
Tana Ramsay gave evidence in a legal action in which her husband, Gordon, is accusing her father, Christopher Hutcheson, of using a ghost writer machine to “forge” his signature
peopleTana Ramsay said alleged discovery was 'extremely distressing'
Arts and Entertainment
Robin Windsor and Aljaz Skorjanec rehearse their same-sex dance together on Strictly Come Dancing
TV
Money
Anyone over the age of 40 seeking a loan with a standard term of 25 years will be borrowing beyond a normal retirement age of 65, and is liable to find their options restricted
propertyAnd it's even worse if you're 40
Arts and Entertainment
Perhaps longest awaited is the adaptation of Jack Kerouac’s On the Road with Brazil’s Walter Salles directing and Sam Riley, Kristen Stewart and Viggo Mortensen as the Beat-era outsiders
books
Arts and Entertainment
theatreSinger to join cast of his Broadway show after The Last Ship flounders at the box office
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Risk Assurance Manager

Negotiable: Argyll Scott International: Hi All, I'm currently recruiting for t...

Argyll Scott International: Business Analyst - MGA - London Market - Insurance Broker

£50000 - £60000 per annum + benefits: Argyll Scott International: A Business A...

Ashdown Group: PR, Marketing & Events Executive - Southwark, London - £35,000

£30000 - £35000 per annum + benefits: Ashdown Group: PR Marketing & Events Exe...

Selby Jennings: C++ Developer – Hedge Fund – New York

$80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible