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Title: SportingBet pulls out of talks to buy Empire Post by: TightEnd on September 20, 2005, 01:20:59 PM Saying it was by mutual agreement.
The problem I think is that the agreement bewtween Party and Empire was so strong that Sportingbet would have been acquiring new customers only, the old customers staying with Party. Thus the economics of the transaction was unattractive. Should they choose to do so, this leaves the way clear for Party to enter the fray Empire shares are currently down 14% at 225p, Sportingbet unchanged Title: Re: SportingBet pulls out of talks to buy Empire Post by: Karabiner on September 20, 2005, 03:02:22 PM Sorry Mr End but you've lost me there.
What is the "strong agreement", and why would they (Sportingbet) be getting new customers only ? ??? Title: Re: SportingBet pulls out of talks to buy Empire Post by: TightEnd on September 20, 2005, 03:08:01 PM Party and Empire have an agreement where Empire is Party's skin, and they share revenue on customers that Empire provide to put into the Party network. Empire provides an excellent marketing team, but does not control its customers. Party does.
The proposed deal would only have worked if Sportingbet could have access to Empire's current customers. My speculation is that during the course of due diligence both parties decided this was not possible...wereSportingbet to acquire Empire, the existing Empire customers would stay with Party In effect therefore Sportingbet would have been paying £800m for 16 employees, future customers and a marketing war with Party and others, notably Cassava/888. As there can be little visibility on Empire's ability to attract customers without Party, the deal was a non-starter |