PartyGaming Looking To Expand

It seems unlikely that Gigamedia shareholders would allow a merger between the company and rival PartyGaming, the talks are still taking place. PartyGaming, fresh off their settlement with the US, is looking to expand, and many believe Gigamedia will be their target. Less than a month ago, PartyGaming agreed to a $105 million settlement with the US DoJ. The settlement stems from the company violating online gambling laws in the U.S., but part of the agreement was that PartyGaming would not be prosecuted for the violations. Now, with the company looking to grow, they are rumored to be among the companies that are involved in negotiations to acquire Gigamedia. The company has hired Goldman Sachs to try and sell if not their entire company, then just their Empire Poker brand. *We have made it very clear we believe the industry will consolidate and we will look at opportunities as and when they arise,* said a spokesman for PartyGaming. The spokesman declined to speak directly about the possibility of taking over Gigamedia. Right now, PartyGaming’s main priority has been to secure funding for future acquisitions. Once the financing is in place, the company will begin sorting through which opportunities to purchase they would like to pursue. (GigaMedia,was incorporated in September 1999 as a company limited by shares organized under the laws of the Republic of Singapore, and completed an initial public offering of its shares on NASDAQ, on February 24, 2000. In December 2007, GigaMedia announced a strategic partnership with and investment in leading game development studio Neostorm Holdings Limited, one of the largest independent game developers in South Korea.  Some resistance from GigaMedia’s shareholders to hold stock in a London-listed company, may create a potential stumbling block to a full merger with PartyGaming.  PartyGaming is regulated and licensed by the Government of Gibraltar and by the Alderney Gambling Control Commission). PartyGaming closed on Friday as the highest traded online gaming company on the London Stock Exchange. They did not, however, receive the increase in price they expected after settling their case with the US.