PartyGaming and Empire Online used to be pals. Then in October PartyGaming blocked those Empire Online players who use the skin serves Empire offers from playing each other. Empire saw stocks drop by half, and in the meantime was being valuated by poker giant PartyGaming for a possible takeover.

Now those talks have ceased, and Empire Online instead is talking about a lawsuit. The ended talks when the valuation came back too low; the initial valuation was placing the value at one tenth of the total share capital of the merged company.

In a statement Empire Online had this to say: "Having received legal advice, the Directors intend to institute and vigorously pursue legal proceedings as soon as possible."

The company remains optimistic. It believes it can deliver profits for the year ending 31 December in line with market expectations.

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