POWER PLAY: PLAYTECH TO PURCHASE RIVAL FIRM TRIBECA
13 November 2006
Mon Nov 13, 2006 9:58 AM GMT31
By Pete Harrison
LONDON (Reuters) – Gambling software maker Playtech (PTEC.L: Quote, Profile, Research) agreed to buy rival Tribeca for $75 million (39 million pounds) on Monday to create a company twice the size of its nearest competitor.
The deal brings with it a number of Internet gambling websites currently operating on Tribeca’s poker software platform, including VCPoker, PaddyPower Poker, Blue Square Poker and Scandinavian group, Expekt.
Playtech said the deal was in line with its strategy of extending its geographical reach, after the United States effectively banned online gaming at last month.
Since then, Playtech and rivals like Cryptologic (CRY.TO: Quote, Profile, Research) (CRYP.L: Quote, Profile, Research) and Boss Media (BOSS.ST: Quote, Profile, Research), have been struggling to find ways of improving margins to compensate for the lost revenues.
Chief Executive Avigur Zmora told Reuters: “Of the non-U.S. businesses, I don’t think we’ll have close competition. Most probably we’ll be more than twice as big as the next one, with around $400,000 of rake (commission) per day.”
Playtech will find “significant” synergies, and its poker revenues will more than double in 2007, he added.
Playtech shares rose 1.6 percent to 193 pence by 9:27 a.m., valuing the group at around 414 million pounds.
The group also announced third-quarter income from non-U.S. players increased to 53 percent from 49 percent a year earlier.
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