PartyGaming is set to secure a place in the FTSE 100 index of leading companies after its bankers priced shares in the world's biggest online poker company at 116p valuing it at £4.64 billion.

When conditional dealing in the shares began this morning, PartyGaming soared to 125.75p in early trade. This represents a premium of 8.4 per cent to the 116p a share offer price.

Cantor Index, the spread-better, quoted a grey market price for PartyGaming shares of between 121p and 124p, an expected premium of nearly 7 per cent for the shares when conditional dealings begin.

The shares surge, after a 116p pricing that was at the low end of the 111p to 127p initial range, sees PartyGaming valued higher than Boots, the chemists chain, Man Group, the quoted hedge fund manager, and 3i, the private equity group.

The float will also result in multi-million pound windfalls for the group's founders - Anurag Dikshit, husband and wife team Ruth Paraso and Russ DeLeon, and Vikrant Bhargava. These four will also retain a 77 per cent controlling interest in PartyGaming once the flotation has been completed.

Trading in the shares goes unconditional at the end of the month.

Richard Segal, the chief executive of PartyGaming, said: "We are delighted that the IPO has received an excellent response from major UK and international institutional investors. The listing will reinforce the group's position as one of the world's leading online gaming companies and enhance the group's profile as we seek to expand internationally."

Initial pre-float research from Dresdner Kleinwort Wasserstein, the bank running the PartyGaming flotation, indicated that the group could be worth considerably more than the price tag set by today's price.

However, PartyGaming has faced setbacks because of the legal uncertainty surrounding online gambling in the US, where PartyGaming generates about 80 per cent of its revenues.

Individual investors have also been excluded from subscribing for shares in advance of the float.

Despite this, and a reported unwillingness among American hedge funds and other investors to support the float because of the legal issues, the subscription period for PartyGaming shares ended with demand comfortably in excess of supply.

The offering consists of 781.6 million ordinary PartyGaming shares, although there is also an option to release a further 115.3 million shares if sufficient demand exists.

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