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Betfair and Paddy Power Take a £5bn Merger Punt

Betfair and Paddy Power take a ₤ 5bn merger punt

26 August 2015

Betfair and Paddy Power are set to merge in a ₤ 5bn deal that would develop one of the world’s greatest online betting and video gaming business.

Final information are still being worked out, however the business said the deal had “compelling strategic reasoning” and enhanced their market position.

Paddy Power investors would own 52% of the combined business, with Betfair financiers owning the remaining 48%.

The combined service would have annual revenues of some ₤ 1.1 bn.

“Discussions remain continuous relating to the other regards to the possible merger,” a declaration said on Wednesday, external.

The new group would be the UK online market leader with a 16% share, according to market information, passing a merged Ladbrokes/Coral on 14%, along with William Hill and the yohaig code independently owned Bet365.

Shares in Betfair skyrocketed 17% to ₤ 30.60 on Wednesday, while Paddy Power jumped more than 18% in Dublin.

If the offer goes ahead, Breon Corcoran, manager of Betfair, would become president of the combined group, while his equivalent at Paddy Power, Andy McCue, would become chief operating officer.

‘Everything about scale’

The combined company prepares to maintain the yohaig code “distinct and complementary” Betfair and Paddy Power brands in Europe.

Mr Corcoran stated: “We basically believe this industry is everything about scale. By creating 2 unique however phenomenally strong brand names, we’ll have a market leading position in the yohaig code UK, Ireland, Australia and in the United States.”

Cormac McCarthy, Paddy Power’s primary financial officer, stated the mix was an “attractive chance”.

“the yohaig code scale and capability is unsurpassed and would leave us in a much better location to compete in our present markets, where competition is extreme,” he said.

Given the complementary nature of the 2 business, he was positive that any competition concerns might be conquered.

Paddy Power was founded in 1988, when 3 Irish bookies merged. It has 350 betting stores and is the third-largest online bookie.

Betfair, on the other hand, is offering a marketplace – or wagering exchange – that lets clients bypass the requirement for a traditional bookmaker.

Based on their closing prices on Tuesday, ₤ 2.4 bn and Dublin-listed Paddy Power was worth EUR3.4 bn (₤ 2.5 bn).

Industry mergers

Shareholders in Paddy Power would get an unique dividend of EUR80m.

There has been a flurry of merger activity in the yohaig code gambling sector in current months.

In July, online betting firm 888 Holdings won a takeover battle for rival Bwin.party in a cash-and-stock bet9ja’s welcome offer valued at about ₤ 898m.

The 2 companies had actually been in discussions since the middle of May.

Ladbrokes and Gala Coral likewise just recently sealed a ₤ 2.3 bn merger.

Online gambling company 888 purchases Bwin

17 July 2015

CVC shelves Betfair takeover quote

14 May 2013