* Fortuna confirms IPO by end of year
* Company valued at up to 250 million euros by analysts
* Companies decline comment on report Penta to sell 35 pct
(Adds valuations, analyst comment)
By Jason Hovet
PRAGUE, Sept 29 (Reuters) - Czech and Slovak financial group
Penta Investments will list a stake in betting group Fortuna
Entertainment on the Prague and Warsaw stock exchanges, the
companies said on Wednesday, confirming earlier reports.
The two firms said the initial public offering (IPO) would
take place by the end of the year, the first share offering in
Prague in more than two years.
"For Penta, through the intended flotation we make a partial
exit, but we still retain a significant shareholding in order to
participate in the further growth of the business," Jozef Janov,
a Penta representative and Fortuna supervisory board chairman,
said in a statement.
Spokesmen declined to confirm an earlier report by Czech
website motejlek.com that Penta planned to sell a 35 percent
stake, with the offering to begin on Oct. 11.
Two sources told Reuters last Friday that the flotation
would take place by the end of October, but declined to say how
much the IPO would be worth. []
Erste Group Bank <ERST.VI>, one of the IPO managers along
with UniCredit <CRDI.MI>, valued Fortuna at 180 million to 250
million euros, based on multiples of 10 to 14 times estimated
2010 earnings, said an analyst and fund manager who saw the
report but asked not to be named.
Fortuna said it expected to pay out 50-100 percent of net
profit in dividends.
"Fortuna shares...will diversify the Prague market for
retail investors, offering a known brand, interesting dividend
and growth potential," Komercni Banka analyst Miroslav Adamkovic
said.
"Low capitalisation and with this (low) liquidity of the
title could bother bigger investors."
Fortuna, active in the Czech Republic, Slovakia, Poland and
Hungary, reported an 11 percent rise in earnings before
interest, tax, depreciation and amortisation (EBITDA) to 11.61
million euros in the first half of the year.
It took bets worth 191.6 million euros in that time, up 12
percent from the year before, through its own and affiliate
shops and through online betting.
In 2009, Fortuna booked 338 million euros in bets and a net
profit of 16.9 million euros. It holds 30 percent market share
in its main market, the Czech Republic.
Fortuna's Austrian peer, the Vienna-listed internet
bookmaker bwin <BWIN.VI>, traded with a price to estimated
earnings ratio of 18.63 on Wednesday, while the European sector
average was 16.25, according to Reuters data.
The Prague bourse has had a drought of company share
offerings in recent years due to the economic crisis and low
interest rates that make it easier for companies to finance
expansion with bank loans.
(Additional reporting by Jana Mlcochova; Editing by Erica
Billingham and David Cowell)
