A big deal is pending. Flutter Entertainment, an Irish gaming-bookmaking company, is going for a 37% stake in FanDuel to increase its participation in the gaming firm. The amount in question is a whopping $4.18. Flutter will pay half the purchase price in cash and half in stock, issuing about 11.7 million Flutter shares to Fastball Holdings, thereby terminating Fastball’s position in FOX Bet, an online sports betting platform.
The FanDuel Group operates a sportsbook and daily-fantasy-sports brands, the TVG broadcasting company, a deposit wagering network, and New Jersey’s Betfair online casino.
Flutter’s stake had been 57.8% so now it has risen to 95%. This means a major inroad into the U.S. market, “most attractive sector opportunity” today.
Of note, the Paddy Power owner had merged with FanDuel in 2018. Now it wants the entire company top to bottom. Not surprisingly, in Dublin trading, shares in Flutter have jumped. In fact, the stock price rose 6%.
The mergers in the gaming world are complicated. Fastball gained an interest in FOX Bet when Flutter merged with Canada’s Stars Group. In 2019, this created one of the world’s biggest online operators.
Lachlan Murdoch, Executive Chairman and CEO of Fox Corporation said that maintaining its ownership stake in Flutter signifies a long-term commitment to the company. It has ongoing confidence in management’s ability to execute against the fast growing U.S. opportunity.
“FOX’s audiences have proven to be highly engaged with free to play
and wagering content, and we are excited to offer them access to
products from Flutter’s market leading stable of US brands.”
Flutter’s chief executive, Peter Jackson explained that the company’s initial acquisition of a controlling stake in FanDuel in 2018 was “transformational” for the shape of the Group.
“Our number one position in the crucial US market is built on many of the assets
we acquired through that transaction, supported by the broader group’s capabilities.”
The intention had always been to increase Flutter’s stake in the business.
“I’m delighted to be able to do so earlier than originally
planned and at a discount to its closest peer.”
As usual, the deal awaits on shareholder approval. Meanwhile Flutter Entertainment reported that key regions have boosted third quarter revenues by 30%. Q3 surpassed expectations in both sports and gaming.
Now it expects full-year earnings before interest, tax, depreciation and amortization (EBITDA) of £1.275-1.350 billion. This is up from the £1.175-1.325 billion forecast last August.