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Copyright 2004 Associated Newspapers Ltd.
DAILY MAIL (London)

December 7, 2004

HEADLINE: Investors' bid gamble is paradise at Sportingbet

BYLINE: GEOFF FOSTER

BODY:
    Online gambling group Sportingbet has been on a roll since splashing out Pounds 169m in October for Costa Rica-based Paradise Poker, one of the world's top four online poker groups. Its share price has rocketed 80pc. But if industry rumours are anything to go by, lucky shareholders could be in for an even bigger jackpot.

    Sportingbet jumped a further 8p to an all-time high of 1801/2p amid whispers that Hilton Group (23/4p off at 2583/4p) which owns Britain's biggest bookmaker Ladbrokes has made a tentative bid approach. Dealers heard that it would prefer a 'friendly' deal but it is prepared to go hostile if necessary. A cash offer in the region of Pounds 807m, or 250p per share, could be on the cards.

    One fund manager said: 'I know the Paradise Poker deal was a big steal at only seven times next year's earnings, but there has been something else behind recent heavy buying of Sportingbet. It comes as no surprise to hear that one of the major bookies could now be sniffing around.'

    The Paradise acquisition has put Sportingbet into a different league. It almost doubled its size and gives it a huge foothold in the US market. There is an online poker frenzy in the US and Paradise has more than 700,000 gamblers on its books. Online poker is a high-margin, hugely cash-generative business that is set to expand as the US poker mania spreads overseas.

    Still reflecting the 10pc stake recently taken by Malaysia's Genting, Stanley Leisure galloped 151/4p ahead to 4871/2p.

    Stanley's chairman Lord Steinberg pocketed Pounds 36m when he sold 10pc of his 22pc shareholding so that the group could form closer ties with Asia's biggest casino operator.

    All bets were off for the Footsie as it fell 40 points before closing 25.1 down at 4722.8. Dealers were spooked by a higher oil price following the terrorist attacks on the US consulate in Saudi Arabia and talk of possible production cuts at Friday's Opec meeting in Cairo. Wall Street traded 65 points lower in early dealings.

    Financial information giant Reuters cheapened 8p to 381p on revived competition fears. Rival Bloomberg plans to extend its EBS joint venture to offer foreign exchange trading capability across all 200,000 Bloomberg terminals. News of City job cuts also put the boot in.

    Travis Perkins soared 58p to 1488p amid speculation that the builder's merchant is lining up an offer for Wickes, the 'heavy' DIY part of Focus Wickes.
FW is owned by private equity house Duke Street and Apax.

    Yet another set of record results lifted computer games publisher SCi Entertainment 211/2p to a peak of 226p.

    Punters with new PlayStation 2 consolesboosted sales of its games, particularly the best-selling Conflict: Vietnam which sold 1.2m copies.

    Full-year profits jumped 28.6pc to a record Pounds 4.5m.

    SCi's pipeline of games is impressive and includes Conflict 4 and Constantine, based on the film starring Keanu Reeves and Rachel Weisz.

    Benefiting from the current strong demand for portable electrical devices such as Apple iPods, Wolfson Microelectronics sparked 103/4p higher to 1303/4p.

    A warning that fourth-quarter sales will be below earlier expectations due to lower demand in Europe and the US left ceramic maker Churchill China 26p lower at 2211/2p.

    Placed on Aim at 5p by broker Durlacher, shares of India Outsourcing almost trebled to 141/2p on heavy buying. The company has been formed to capitalise on acquisition and investment opportunities in the India business process outsourcing market.

    Another newcomer, Gatekeeper Systems, a provider of trolley-based anti-theft systems to the retail industry, closed 3p above its 48p placing price.

    First Calgary Petroleum gushed 57p to 701p on speculation that Statoil, the Norwegian state- controlled group, is a leading contender to buy First Calgary in an auction process to be held early next year.

    Internet and network security group Harrier held steady at 17p despite terminating merger talks with Germany's Articon-Integralis. Harrier said it is now in talks with another interested party which could lead to an offer for the company.

    River Diamonds firmed 1/8p to 23/4p following an upbeat drilling report.

    TOBACCOS ran out of puff after Deutsche Bank downgraded Bats (4p easier at
886p) and Imperial Tobacco (15p lower at 1367p) to hold from buy. But Deutsche still believes the tobacco industry will provide superior returns for investors.
Cash will be returned to shareholders over the long term and merger and acquisition activity in the short term will eventually push prices higher.

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