The directors of Empire Online confirmed today that that the company has instituted legal proceedings against the owner of the world\’s biggest online poker site in the High Court of Gibraltar.
Empire said it will seek substantial damages and injunctive relief from PartyGaming, adding that it is currently engaged in confidential arbitration proceedings with WPC Productions, a subsidiary of PartyGaming.
Empire gave no further details, but a source close to the company said Empire was claiming that PartyGaming had breached contracts by marketing to Empire\’s best customers after the decision in October to separate its own poker players from those of its \’skins\’.
“We congratulate Empire on kick-starting the pantomime season,” commented John Shepherd, PartyGaming\’s Director of Communications, while dismissing the news.
“We remain highly confident of a successful outcome to the litigation with Empire,” he added.
PartyGaming entered talks to buy Empire Online early last month, but the talks collapsed when the company confirmed to have made a revised offer, equivalent to approximately 60p per share, which Empire Online declined as it was significantly different from the initial approach, understood to be worth 130p per share.
“If this legal action is in any way an attempt by Empire to bounce us into a deal, then they had better go back to the drawing board,” said Shepherd.
Last week, analysts at Morgan Stanley said that PartyGaming could face a potential liability of over £300m should Empire’s pending legal action be successful.
“On a simplistic basis, we assume that the maximum potential liability is the market capitalisation of Empire that was directly eroded as a result of the platform split, plus reputational damage,” said the US broker in a research note.
Calculators
