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Copyright 2004 The Deal, L.L.C.
Daily Deal/The Deal

October 29, 2004 Friday

HEADLINE: SportingBet buys Paradise Poker

BYLINE: by Danny Fortson in London

HIGHLIGHT: The British online betting company pays $309.1 million for the poker house.

BODY:
   Online betting company SportingBet plc made a big wager Thursday, Oct. 28, on online poker house Paradise Poker, agreeing to pay £169.1 million ($309.2million) in cash and stock for the San Jose, Costa Rica, company.

   London-based Sportingbet, which is listed on London's Alternative Investment Market, will finance the deal with a £90 million facility from Barclays Bank.

   The remainder will come from issuing 56.6 million shares to vendors.

   Paradise has 10% of the global online gambling market, and Sportingbet said the deal makes it the world's largest online gambling site.

   Chris Treneman and James Rudd of Dresdner Kleinwort Wasserstein advised the buyer. Dresdner, which handled Sportingbet's initial public offering in January 2001, also underwrote the share issue for the deal.

   Quentin Humberstone of PricewaterhouseCoopers Corporate Finance advised Paradise Poker.

   The deal also carries several performance-based conditions that could push the total price up another $50 million, depending on whether Paradise hits certain revenue targets over the next three years.

   Through July the company earned $21.3 million on $37.2 million in revenue.

   British politicians are expected to pass legislation relaxing gambling laws, allowing for U.S.-style casinos in the country.

   Sportingbet shares rose 17 pence, or 14.7%, on the news, to close at 133 pence.

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