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British newspaper, ‘The Observer”, reported over the weekend that Party Gaming, the London-listed online gambling group, will be the most likely winner in the bid to buy out Victor Chandler, the online gambling group. Victor Chandler focuses primarily on sports betting but also has online casino and poker interests. Both Party Gaming and Victor Chandler are based in Gibraltar. In addition to Party Gaming, there are two other interested bidders for the Chandler business, which is valued at approximately GBP 300 million. After Party Gaming’s flotation on the London stock exchange last year, the company was able to raise GBP 500 million and is now anxious to use that money towards the purchase of the Victor Chandler sports betting business. Party Gaming apparently sees the acquisition of Victor Chandler as a the smart way to proceed following its separate acquisition last month of the GBP 69 million Bulgarian based Gamebookers business. Highly regarded and well established in the industry, the Victor Chandler Group was started by the grandfather of the group’s present boss, also named Victor Chandler. To handle and evaluate unsolicited approaches, corporate finance firm Zeus Capital was hired by the Chandler business for advice on how to proceed. Neither Party Gaming nor Victor Chandler were willing to comment on the possible acquisition but informed sources at “The Observer” did confirm Party Gaming’s interest and said that negotiations would probably begin in September once Chandler was back from his holiday in the Greek Islands. Chandler (55) inherited the floundering betting business after his father died and was able to turn the company’s fortune around. Now, thanks to Chandler Jr., who pioneered telephone betting, the company has a GBP 1.4 billion turnover. In 1996 Chandler moved the business to Gibraltar and trade took off. The decision to move to Gibraltar has allowed the business to avoid the betting tax, which has incurred the wrath of Labor Government Chancellor of the Exchequer, Gordon Brown. Brown abolished tax on punters' winnings as a direct result of Chandler's success. The Victor Chandler group is viewed very favorably because they do not take bets from the United States where Internet gambling is illegal and because it’s significant following in the Far East. PartyGaming, which made its fortune with online poker, is looking to broaden its business by turning towards the sports betting business – particularly in Asia and Europe. While it currently derives most of its business from America, it is attempting to diversify to other markets and the sport betting business is seen as a good alternative for the firm. The Chandler group established its reputation by servicing high rollers but has since developed a wider client base by focusing on its Internet operations. The company’s Internet operations make up nearly 80 percent of the bets placed. Two other offers are also on the table for Chandler but the identities of these potential buyers are still unknown. Posted on: September 3, 2006
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