With a Fastball, Fox, Flutter Fancies FanDuel
In a complex US$4.18bn (£3.11bn/€3.44bn) move, Flutter Entertainment—owner of iconic Paddy Power Betfair and Pokerstars—is poised to up its stake in US betting fantasy sports brand FanDuel to 95 per cent.
Flutter, which already owns 57.8 per cent of FanDuel, now wants to purchase the 37.2 per cent stake in the company held by Fastball, a cabal of corporate investors controlled by venture capitalists KKR.
The Dublin-based, FTSE100-listed Flutter has agreed to pay Fastball in a bundle of US$2.09bn (£1.55bn/€1.72bn) in cash and the balance in equity and shares.
There are further reports suggesting that Flutter intends to offer media giant Fox Sports the option to purchase 18.5 per cent of the FanDuel brand on the back of an anticipated post-Covid market recovery, around July next year.
The FanDuel buy-out is expected to launch tomorrow, December 8, with the shares placement.
“[We have] consulted with a number of [our] major shareholders prior to the Placing and [we are] pleased by the strong support received from new and existing shareholders,” Flutter said in a company statement.
And the betting giant’s CEO Peter Jackson elaborated: “Flutter’s initial acquisition of a controlling stake in FanDuel in 2018 has been 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.
“Our intention has always been to increase our stake in the business and I’m delighted to be able to do so earlier than originally planned and at a discount to its closest peer.”
The Fox Corporation, owners of Fox Sports, also signalled its strong support for Flutter’s acquisition of more FanDuel equity.
“We are delighted to participate in this capital raising,” said Lachlan Murdoch, Executive Chairman and Chief Executive of Fox Corporation.
“Maintaining our ownership stake in Flutter signifies our long-term commitment to the [company] and [our] confidence in management’s ability to execute against the fast growing US 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.”