From eGaming Review Magazine

Sportingbet is preparing to buy the world’s third largest poker site from its owners Tropical Paradise in a deal worth more than US$300m.

The two firms are reportedly in advanced talks, with Sportingbet willing to pay US$313m (£170m) to acquire the successful poker site.

The price mentioned represents around 7.5x earnings, according to estimates from industry monitor pokerpulse.

If successful this would be one of the largest deals ever to take place in the egaming sector, and would almost double Sportingbet’s market capitalisation overnight.

Investors in SportingBet, which has a market cap of US$337m, reacted cautiously to the news and shares were down 2% shortly after the markets opened this morning.

Although it is profitable Sportingbet has debts of US$66m, and would need to raise equity to finance the deal.

But the purchase of paradise would be a major coup for the firm, which has struggled so far to make any real impact on the poker sector.

Paradise has been online since 1999, and has an estimated annual gross win of US$40m.