• Flutter
Entertainment, the new name for Betfair Paddy Power agress mega merger with The
Stars Group, Pokerstars owner along with Sky Bet, in £10bn
deal
Flutter Entertainment, the parent
company recently created with the name of one of the original Betfair merger
partners, Flutter.com, now owner of Paddy Power Betfair, has agreed a deal to
acquire all of the shares in The Stars Group (TSG) and merge with the operator
to form a combined business with annual revenue of £3.8bn
(€4.3bn/$4.7bn).
Under the agreement, which would create the
largest online betting and gaming operator globally, Flutter would exchange
0.2253 new shares in exchange for each TSG share, with Flutter shareholders
owning approximately 54.64% of shares in the combined business and TSG
shareholders 45.36%
Flutter chief executive Peter Jackson, who would
assume the same role at the combined business, said: “The combination
represents a great opportunity to deliver a step change in our presence in
international markets and ensure we are ideally positioned to take advantage of
the exciting opportunity in the US through a media relationship with Fox Sports
as well as our development of US sports betting through Flutter’s FanDuel
and TSG’s Fox Bet brands.
He added, “We believe the
combination of Flutter and TSG will deliver substantial value for shareholders.
We will have an exceptional portfolio of leading recreational brands and
best-in-class products on industry-leading technology
platforms.”
Flutter chief financial officer Jonathan Hill would
assume the same role at combined group, while TSG chief executive Rafi
Ashkenazi would serve as chief operating officer. “This exciting
combination will allow us to enhance and accelerate our existing strategy,"
Ashkenazi said. "In recent years, we have transformed TSG from a single product
operator in poker, to a diverse global leader with multiple product offerings
across poker, gaming and sports betting.
Other conditions needed for the
deal to be final include approval from the FCA, London Stock Exchange and
Euronext Dublin, as well as the satisfaction of various merger controls,
foreign investment and gaming related approvals in the UK, Ireland, Australia,
the US and Canada.
Flutter bought FanDuel last year as it sought to
establish a US bulkhead in the wake of the supreme court’s decision to
legalise sports betting, a ruling that triggered a race between UK bookmakers
to enter the lucrative new market.
Fox Sports, TSG’s US media
partner for Fox Bet, will have the right to purchase an 18.5% equity interest
in FanDuel Group at its market value in 2021
"Our Fox Bet partnership
is off to a great start, and teaming up with Flutter and FanDuel will allow us
to build on that strength and jointly capture the significant market potential
ahead of us," Fox Corporation executive chairman and CEO Lachlan Murdoch
commented. "We're excited to be able to expand our partnership into FanDuel,
which together with FOX Bet, will be a leader in sports wagering in the
US."
Meanwhile, Boyd, Flutter’s co-shareholder in FanDuel, and
Fastball will receive a payment of 12.5% of the increase in Fox Bet’s
market value between completion of the merger and the exercise of
Flutter’s option to acquire Fastball’s remaining equity interest in
FanDuel in July 2023.
In return, Fox Sports, Fastball and Boyd have
waived exclusivity provisions that form part of the existing contractual
arrangements in relation to the relevant US subsidiaries of TSG and Flutter.
“This will enable Flutter to capitalise upon the relaxation of
American laws on sports betting, which is now legal in 11 states, with seven
more primed to announced a launch date,” said Russ Mould, the investment
director at stockbroker AJ Bell. |
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