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Online gaming operators slump on arrest

By Simon Kennedy
July 17, 2006

LONDON (MarketWatch) -- Gambling companies slumped Monday in London after the chief executive of BetOnSports was detained by U.S. federal authorities, while takeover bids and speculation helped boost retailer GUS and retirement-home builder McCarthy & Stone.

Gaming stocks slumped across the board after David Carruthers, CEO of BetOnSports Plc, (UK:BSS: news, chart, profile) was detained by federal authorities while changing flights in the U.S.

Shares in BetOnSports ended nearly 17% lower. PartyGaming (UK:PRTY: news, chart, profile) fell 5.5% and Sportingbet (UK:SBT: news, chart, profile) dropped 13%. See full story.

"At the best of times, this is an up-and-down sector," said Rob Kilner, an investment-support adviser at Redmayne-Bentley Stockbrokers.

Carruthers's detention could indicate that U.S. authorities are targeting overseas companies that enable U.S. citizens to gamble via the Internet, said Kilner.

More broadly, the FTSE 100 index (UK:UKX: news, chart, profile) lost 0.1%, or 6.6 points, at 5,701. European markets were also lower as worries over the conflict between Israel and Lebanon continued. See Europe Markets.

Metals stocks including Xstrata (UK:XTA: news, chart, profile) and Antofagasta (UK:ANTO: news, chart, profile) were among the worst-performing FTSE 100 components.

Among gainers, McCarthy & Stone (UK:MCTY: news, chart, profile) was the standout in the mid-caps, adding 11.3% at 1,048 pence after it agreed to be bought by a consortium led by private equity group Permira and the Barclays Capital unit of Barclays Plc (UK:BARC: news, chart, profile) for 1.03 billion pounds ($1.89 billion).

McCarthy & Stone pushed above the deal price of 1,000 pence a share after the Bank of Scotland unit of HBOS (UK:HBOS: news, chart, profile) said it was considering a 1,030 pence a share bid for the retirement-home builder.

The offer helped lift the broader home-building market, said Redmayne-Bentley's Kilner.

Persimmon (UK:PSN: news, chart, profile) , Barratt Developments (UK:BDEV: news, chart, profile) and Wilson Bowden (UK:WLB: news, chart, profile) all advanced.

In other bid news, GUS (UK:GUS: news, chart, profile) added 1.9% after a report in the Times of London that private-equity firms Blackstone and Kohlberg Kravis Roberts have teamed up to launch a 4-billion-pound bid for the company's retail arms Argos and Homebase.

The newspaper reported that the private-equity firms are keen to acquire the units before GUS's announced demerger, in which it plans to separate the retail divisions from its Experian credit-checking unit.

Matalan (UK:MTN: news, chart, profile) , the discount retailer, also advanced on takeover hopes. Matalan rose 3.1% on a report in The Mail on Sunday that its chairman, John Hargreaves, will offer up to 800 million pounds for the company.

In other corporate news, computer-game publisher SCi Entertainment Group (UK:SEG: news, chart, profile) slipped 2.1% after it said it expects annual profit before tax, interest and amortization to be in line with market forecasts of 25 million pounds.

The publisher of the Tomb Raider Legend and Hitman Blood Money games also said it is planning 19 launches for 2007, compared to nine in 2006.

Source: Online Gaming News Wire

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