Empire Online Limited 21 November 2005 21 November 2005 Empire Online Limited ("Empire Online" or "the Company") Offer Update On 3 November 2005, Empire Online announced that it had received an approach in relation to an offer for the entire issued and to be issued share capital of the Company. This approach was from PartyGaming plc ("PartyGaming") and was initially expressed to be an all share offer, valuing Empire Online at 10 per cent. of the value of the enlarged entity. Following a protracted due diligence process and continued delays in the timetable, PartyGaming has made a revised proposal that is significantly different both in terms of the price and structure and at a level that cannot be recommended. Empire Online as therefore terminated discussions with PartyGaming. The directors of Empire Online ("Directors") have explored whether legal action might be taken by Empire Online in relation to damage caused to it by the conduct of companies within the PartyGaming group in separating the poker system used by PartyGaming players from that of its "skins". Having received legal advice, the Directors intend to institute and vigorously pursue legal proceedings as soon as possible. Trading statement The Company is committed to continuing to deliver its high growth strategy across the Empire Online network, the principal elements of which are:* to continue growing the number of new real money players across Empire Online's platforms, using its multiple distribution channels. The Company is adding an average of more than 500 new real money players per day across its network so far in November 2005; * to continue to drive strong growth in new real money players across the Company's new platforms, namely the Club Dice casino suite and Noble Poker. As stated in the Trading Update of 18 October 2005, these new brands account for a growing proportion of Empire Online's new real money players, representing well over 50% of new real money players signed during Q4 2005; * to investigate commercial strategic opportunities for the Company. Empire Online has received several commercial strategic approaches over the past few months and intends to pursue discussions in relation to these approaches. The Company's strategy in relation to existing Empirepoker.com players will depend in part upon the outcome of any litigation against PartyGaming. * for the year ending 31 December 2005, the Company expects to deliver net profit broadly in line with the levels announced by Empire Online on 18 October 2005. For the year ending 31 December 2006, (and subject as set out below) the Directors believe that net profit will be broadly in line with current market expectations. The Directors expect that net profit of around $37 million should be generated from its businesses not having any relationship with PartyGaming, including the Club Dice suite, Noble Poker and other businesses. The balance of net profit for that year is expected to be derived from Empire Poker. The level of contribution from Empire Poker could be impacted by the nature of the ongoing commercial relationship between Empire Online and PartyGaming, other "skins" leaving the "skins'" platform and the outcome of any legal action against PartyGaming. Noam Lanir, Chief Executive, commented today "Empire Online has in place the foundations for sustainable long term growth ahead of the market, through its unique marketing skills and its multiple platforms. I am delighted in the growth we are seeing in our new platforms and this is testament to the strength of our network. We intend to remain leaders in the online gaming industry and will employ all our efforts to build and grow value for our shareholders" For further information: Empire Online Limited Andrew Burnett +44 (0) 20 7638 9571 for Monday 21st November +357 (2) 5 847 700 thereafter Citigate Dewe Rogerson +44 (0) 20 7638 9571 Simon Rigby Sarah Gestetner Ged Brumby ENDS This information is provided by RNS The company news service from the London Stock Exchange