Betfair and Paddy Power take a ₤ 5bn merger punt
26 August 2015
Betfair and Paddy Power are set to merge in a ₤ 5bn offer that would produce one of the world's greatest online betting and gaming companies.
Final details are still being exercised, however the companies said the bet9ja's welcome offer had "compelling tactical reasoning" and improved their market position.
Paddy Power investors would own 52% of the combined business, with Betfair investors owning the remaining 48%.
The combined service would have yearly incomes of some ₤ 1.1 bn.
"Discussions stay ongoing concerning the other regards to the possible merger," a statement said on Wednesday, external.
The brand-new group would be the UK online market leader with a 16% share, according to market data, passing a merged Ladbrokes/Coral on 14%, along with William Hill and the yohaig code privately owned Bet365.
Shares in Betfair soared 17% to ₤ 30.60 on Wednesday, while Paddy Power leapt more than 18% in Dublin.
If the offer proceeds, Breon Corcoran, boss of Betfair, would become president of the combined group, while his counterpart at Paddy Power, Andy McCue, would become chief operating officer.
'Everything about scale'
The combined company prepares to maintain the "distinct and complementary" Betfair and Paddy Power brands in Europe.
Mr Corcoran stated: "We fundamentally think this promotion code market is everything about scale. By creating 2 distinct however phenomenally strong brand names, we'll have a market leading position in the UK, Ireland, Australia and in the United States."
Cormac McCarthy, Paddy Power's chief financial officer, stated the combination was an "appealing chance".
"The scale and ability is unparalleled and would leave us in a better place to complete in our present markets, where competition is extreme," he said.
Given the complementary nature of the two companies, he was confident that any competitors concerns might be conquered.
Paddy Power was established in 1988, when three Irish bookmakers combined. It has 350 wagering shops and is the third-largest online bookmaker.
Betfair, in contrast, is providing a marketplace - or betting exchange - that lets clients bypass the need for a standard bookmaker.
Based upon their closing costs on Tuesday, Betfair deserved ₤ 2.4 bn and Dublin-listed Paddy Power was worth EUR3.4 bn (₤ 2.5 bn).
Industry mergers
Shareholders in Paddy Power would receive an unique dividend of EUR80m.
There has been a flurry of merger activity in the gambling sector in current months.
In July, online betting company 888 Holdings won a takeover fight for competing Bwin.party in a cash-and-stock deal valued at about ₤ 898m.
The two companies had actually remained in conversations considering that the middle of May.
Ladbrokes and Gala Coral also just recently sealed a ₤ 2.3 bn merger.
Online gaming company 888 buys Bwin
17 July 2015
CVC racks Betfair takeover bid
14 May 2013
