Here’s a public relations challenge: You want your company to list on the prestigious London Stock Exchange, as a blue chip stock in the FTSE 100 index, no less. But your tax haven-based company is in the online gambling business; your founders, a Californian husband-and-wife team, made their reputations in the “adult entertainment” business; your biggest single shareholder and chief operating officer is an unknown young Indian techie named Dikshit; and the bulk of your customers (over 80 percent) are in the United States, where the Justice Department has declared that internet gambling is illegal.
Those were the formidable obstacles facing PartyGaming — the company in question — in the run-up to its flotation last June. But it joined the London Stock Exchange as a FTSE 100 company with a market value of €7 billion ($8.6 billion) — greater than prestigious corporate names such as British Airways and Marks & Spencer. The float was the biggest in London in five years, and the share price soared by more than 50 percent in its first month. After the float, the CFO of the Gibraltar-based company, Martin Weigold, who had been recruited by PartyGaming from entertainment group Jetix (formerly Fox Kids Europe) only six months before the listing, was being lauded in the business press as a finance guy to watch. How did it all go right for PartyGaming?
A key element in the flotation’s success was undoubtedly the financial public relations campaign. But, to hear Weigold describe it, that part of the operation was done more on a wing and a prayer than as a carefully executed battle plan.
“It’s not that we didn’t know that financial PR was going to be important, but we were very much prioritizing other areas in order to float the company,” Weigold says. Indeed, when he joined, he found a finance department with no directors of treasury, risk management, tax, financial planning and analysis, “and, of course, no director of investor relations.” The company would be the first-ever FTSE 100 company based in Gibraltar, making recruiting for the top jobs more difficult than usual. Weigold was only able to get IR director Peter Reynolds on board from Rank Group (PartyGaming CEO Richard Segal’s alma mater) just two weeks before the IPO launch. A director of communications was found only well after the listing.
That meant that financial public relations before the float was directed by an outside adviser, Financial Dynamics, which was brought in by the lead investment bank, Dresdner Kleinwort Wasserstein. It’s a typical scenario these days: the lead investment bank almost always chooses the financial PR adviser for transactions like IPOs and acquisitions, except for occasions when a top executive has built up a particularly strong bond with a PR advisor. Luc Vendeveldt, for example, switched Carrefour’s account from PR firm Tulchan to Brunswick when he joined the French retail chain as chairman last year.
In PartyGaming, there was, as Weigold readily admits, “a unique set of challenges” from the public relations perspective. “If you were a journalist and you wanted to write a story, there were a great many areas that you could dip into,” he says.