Herbert Smith has adopted a radical policy not to handle IPOs in the controversial online gaming sector after it emerged that the firm pulled out of 888.com’s £700m IPO last autumn after its client, underwriter Credit Suisse, withdrew from the deal.
Herbert Smith litigation partner Peter Burrell declined to comment on the 888.com IPO, but confirmed that the firm’s policy was to steer clear of flotations in the internet gaming sector.
Burrell said: “Our stance on internet gaming has paid dividends. The firm has landed a number of mandates to advise institutional clients on the fallout from the problems the sector is facing, including issues relating to extradition and money laundering.”
As first reported by The Lawyer last September (12 September 2005), New York heavyweight Skadden Arps Slate Meagher & Flom warned that investment banks should avoid underwriting online gaming IPOs due to concerns that internet betting may be illegal in the US.
Online gaming has attracted negative headlines since the arrest of BetonSports chief executive David Carruthers, but firms are queueing up to advise on a number of online gaming IPOs in the pipeline, including most notably that of Pokerstars, which is expected to float later this year.