Gaming firm offers 39 million shares in IPO
Market capitalisation of 113.6m beats expectations
Immediate future ‘will be exciting time for firm’
"The worldwide online gambling market was estimated to be worth in the region of $5.7 billion [3.06bn] in 2003 and we believe that the immediate future will be a very exciting period for BetonSports and the market in general" - David Carruthers, chief executive BetonSports
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GAMING company BetonSports has hit the jackpot, raising 54.6 million in the third-biggest initial public offering on London’s junior stocks market, the Alternative Investment Market (AIM), this year.
Interest was stronger than expected in its placing of 39 million shares with institutional investors at 140 pence apiece, representing 48.1 per cent of its issued share capital.
The placing price will give a market capitalisation of around 113.6 million. That is considerably better than the 100m that the firm, which operates a US online betting agency and casino, had expected, it said.
The stock will start trading on the AIM from 7am on Thursday.
"We already have a track record of successful, profitable, organic growth and our listing on AIM will allow us to consider possible value enhancing acquisition opportunities in various geographical locations and also to explore possible complementary brand acquisitions," chief executive David Carruthers said in a statement.
He added: "The worldwide online gambling market was estimated to be worth in the region of $5.7 billion [3.06bn] in 2003 and we believe that the immediate future will be a very exciting period for BetonSports and the market in general."
Half the money raised was through the placing of existing ordinary shares and half from the placing of new shares.
From the 27.3m proceeds from new shares, 8.2m will be used to buy out the 49 per cent of Millennium Group not already owned by the firm. Millennium runs some of BetonSports’ online gambling portals. The rest will be used to fund international acquisitions, mainly in the Far East and Latin America, the company said. BetonSports previously aborted an attempt to join the junior market in 2001.
More than 33 million bets were placed with the firm last year, equating to more than one bet every second. Online gaming is an increasingly successful sector, with an estimated nine million people worldwide gambling on the internet.
Earlier this year, UK company Interactive Gaming Holdings announced a revenue-sharing deal on one of its 1100 gaming internet sites with online betting firm - and BetonSports rival - Sportingbet. IGH said that Sportingbet, which has more than one million customers, would operate betting on its oneworldsportbook.com website in return for a monthly payment based on net revenue.
IGH did not say what the deal was worth.
London-based Sportingbet last year reported profits of 14.6m, but this year saw bets placed by punters in Europe double to 2.9 million in the three months to March 31, while it took a total of 9.1 million bets worldwide.
Gambling is, however, a risky business. In the autumn of 2003, Sportingbet said it had suffered at the hands of lucky punters, after posting wider first-half losses.
The firm said too many results had gone as expected, meaning it had to pay out more than planned. Pretax losses were widened and the company’s gross margin was dented by 2m in the last two weeks of September 2003 alone.
UK firms lead the internet betting industry because the United States is more tightly controlled by gambling laws.