Empire raised £123m in London on Wednesday at 175p a share, with its Israeli chief executive Noam Lanir pocketing £50 million from a transaction associated with the AIM float, reported the Telegraph this week.
But Empire Online, an the gambling marketer, looked to have burned at least some investors when its shares dived 20½ to 153p on its second day of trading.
Later, Empire’s advisers said it had been caught up in the poor sentiment over the mooted £4.76 billion float of PartyGaming, which has already had to cut its planned listing valuation by about £1 billion.
Jag Mundi, head of corporate finance at Numis Securities, Empire’s adviser, said: “We have been caught up in the cross-fire over the PartyGaming float. There’s a lot of talk over whether their float will succeed or fail or whether they will have to cut their price again.”
He said the Empire business, chaired by Stanley Leisure founder Lord Steinberg, was “…the same as it was when it floated” but had been hit by PartyGaming cutting its planned listing price.
Of the cash raised by Empire at the float, only £18m was for the company, with the rest pocketed by the owners, who still have more than 75pc of the group, now valued at £448m.
There were further market jitters over PartyGaming, whose conditional dealings are scheduled to start on June 27. City bookie IG Index said its spread for the shares had slipped to 110p-118p, while Cantor Index has a range of 112p-115p. PartyGaming’s indicative range is 111p-127p.
One City banker said: “I think it’s really going to struggle. I’m trying to find some support.”
Another banker said: “The institutions know Party’s owners really want to get it away, so they’re going to force the price down. You could get a share price of £1.” The owners could pocket more than £1 billion from the float