Anurag Dikshit is to sell two thirds of his 28% stake in the company.
The egaming billionaire will sell 75 million shares through his vehicle Crystal Holdings, cutting his stake to 39 million shares, or 9.5% of the issued share capital in the company.
The shares will be sold by Goldman Sachs through an accelerated offering to institutional investors.
The sale price is yet to be announced, but the shares would be worth circa £213m based on yesterday’s closing price of 284.5p.
Dikshit’s spokesman Shimon Cohen told Bloomberg: “He wants to move on with his life, sell his shares, endow them in his charitable foundation, and move away from the whole issue and industry of PartyGaming.”
Cohen added that Dikshit may go on to sell his entire stake.
Dikshit pleaded guilty to illegal internet gambling last December and agreed to forfeit US$300m to US authorities for his role in the company’s activities in the US prior to the passage of America’s Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.
In April, PartyGaming settled with the US authorities for its pre-UIGEA activities for $105m, becoming the only major online gambling business to do so. With Dikshit having pleaded guilty to internet gambling charges under the Wire Act, the reduction of his shareholding below the 15% threshold required to nominate to the board is likely to improve the company’s potential for receiving a licence in the US should America legalise online gambling.
However Dikshit’s fellow founders and principal shareholders Russ DeLeon and Ruth Parasol, who each own 58 million shares, have shown no sign of moving towards settlement.
PartyGaming shares initially fell up to 12% upon Dikshit’s announcement this morning, the biggest drop in 11 months of London trading in the equities.
However analysts predict the sale will increase the liquidity of Party’s stock, with ‘free float’ shares, i.e. those that are traded often rather than tied up with individuals, potentially rising from 177m to 290m shares, or 70%, if the entire stake is sold.
However Morgan Stanley analyst Vaughan Lewis argued that the move does not reflect on PartyGaming, but rather on Dikshit’s own desire to devote more time and money towards charitable projects.
Lewis said: “We do not think this reflects any ‘edge’ Dikshit might have on regulatory, trading or other developments, as he is not involved in these areas - he is not on the board – [he is] devoting his time and money to philanthropy.”