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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 combine in a ₤ 5bn deal that would create among the world’s most significant online betting and video gaming companies.

Final details are still being worked out, but the companies stated the bet9ja’s welcome offer had “compelling strategic logic” and increased their market position.

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

The combined company would have yearly earnings of some ₤ 1.1 bn.

“Discussions stay continuous relating to the other terms of the possible merger,” a statement stated 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%, in addition to William Hill and the privately owned Bet365.

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

If the deal proceeds, Breon Corcoran, boss of Betfair, would end up being chief executive of the combined group, while his equivalent at Paddy Power, Andy McCue, would end up being chief running officer.

‘All about scale’

The combined company plans to maintain the “distinctive and complementary” Betfair and Paddy Power brand names in Europe.

Mr Corcoran said: “We essentially think this promotion code market is all about scale. By putting together two unique but 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 monetary officer, said the mix was an “appealing chance”.

“The scale and capability is unmatched and would leave us in a much better location to compete in our existing markets, where competition is extreme,” he said.

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

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

Betfair, on the other hand, is offering a market – or wagering exchange – that lets consumers bypass the requirement for a traditional bookie.

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

Industry mergers

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

There has actually been a flurry of merger activity in the betting sector in recent months.

In July, online gaming firm 888 Holdings won a for competing Bwin.party in a cash-and-stock deal valued at about ₤ 898m.

The two business had actually remained in discussions because the middle of May.

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

Online gaming firm 888 buys Bwin

17 July 2015

CVC shelves Betfair takeover quote

14 May 2013