Betfair and Paddy Power take a ₤ 5bn merger punt
26 August 2015
Betfair and Paddy Power are set to combine in a ₤ 5bn bet9ja's welcome offer that would create one of the world's biggest online betting and gaming business.
Final details are still being worked out, but the business stated the deal had "compelling tactical reasoning" and boosted their market position.
Paddy Power investors would own 52% of the combined company, with Betfair investors owning the staying 48%.
The combined organization would have annual earnings of some ₤ 1.1 bn.
"Discussions remain ongoing relating to the other regards to 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%, as well as William Hill and the independently 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 yohaig code combined group, while his counterpart at Paddy Power, Andy McCue, would end up being chief operating officer.
'Everything about scale'
The combined company plans to retain the "unique and complementary" Betfair and Paddy Power brand names in Europe.
Mr Corcoran stated: "We fundamentally believe this promotion code industry is all about scale. By putting together two unique however phenomenally strong brands, we'll have a market leading position in the UK, Ireland, Australia and in the yohaig code United States."
Cormac McCarthy, Paddy Power's primary monetary officer, stated the combination was an "appealing opportunity".
"The scale and capability is unmatched and would leave us in a much better location to contend in our current markets, where competitors is intense," he said.
Given the complementary nature of the 2 companies, he was positive that any competitors issues might be conquered.
Paddy Power was established in 1988, when three Irish bookmakers merged. It has 350 betting shops and is the third-largest online bookmaker.
Betfair, in contrast, is providing a market - or betting exchange - that lets consumers bypass the requirement for a standard 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 a special code yohaig dividend of EUR80m.
There has actually been a flurry of merger activity in the gaming sector in recent months.
In July, online betting company 888 Holdings won a takeover fight for competing Bwin.party in a cash-and-stock bet9ja's welcome offer valued at about ₤ 898m.
The two business had remained in discussions given that the middle of May.
Ladbrokes and Gala Coral also recently sealed a ₤ 2.3 bn merger.
Online gaming company 888 purchases Bwin
17 July 2015
CVC shelves Betfair takeover bid
14 May 2013
