hares in 888, which had lost a quarter of their value in the past three months, were up 10.2 % at 94 pence by noon. "It's an amazing deal if the U.S. market opens up to online gaming one day and it's a good deal even if it's Europe only. We have more big American deals in the pipeline for the B2B unit," CEO Gigi Levy told Reuters in an interview.
Financial details of the deal were not disclosed but Levy said it was worth "millions of dollars" and would be earnings enhancing next year. Under the deal Dragonfish will also deliver its e-payments, and customer support services to help grow the WSOP and Caesars brands online.
News of the agreement prompted brokers KBC Peel Hunt and Numis to upgrade 888 to 'buy' from 'hold'. "This is a major coup for 888 and demonstrates the value of its B2B (business-to-business) offering," said Daniel Stewart analyst James Hollins. "It vindicates the investment made in B2B by 888 and naturally propels 888 as the most likely B2B partner for Harrah's in the U.S. should that market open up to online gaming," he added.
Harrah's, the operator of more than 50 casinos, was acquired by private-equity firms Apollo Management LP and TPG Capital for us$ 30.7 billion in January 2008. 888 and PartyGaming both reported lower first-half profit last month but said they expected trade to pick up in the second-half.