PartyGaming US settlement opens door to M&A

Online gaming firm PartyGaming said on Tuesday it had reached an agreement with United States authorities that will protect it from being prosecuted and opens the door to consolidation across the industry.

The settlement is in relation to PartyGaming's activities in the U.S. prior to the industry effectively being outlawed by legislation introduced in 2006.

The owner of the PartyPoker website said, under the terms of the agreement, it had agreed to pay $105 million, payable in semi-annual instalments over a period ending on Sept 30 2012. The deal is expected to open up consolidation opportunities across the industry.

"We are now well-placed to seize organic as well as strategic opportunities that previously were beyond our reach," said chief executive Jim Ryan.

On a conference call with reporters, Ryan said the settlement will help PartyGaming gain access to capital with which to participate in industry consolidation.

He said the company had already approached a number of banks regarding financing and received a favourable response.

"We're confident we'll have access to capital to meet our M&A desires. We've received a favourable indication from the parties that we've gone to that, once this matter was resolved, we would have access to not only the equity markets, but the debt markets too," said Ryan.

Shares in PartyGaming gained 11 percent to 243 pence at 0810GMT, leading the FTSE 250 risers, with rival 888 gaining 9.5 percent to 98.25 pence.