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 produce one of the world's biggest online betting and gaming business.
Final information are still being worked out, however the companies said the deal had "engaging strategic logic" and increased their market position.
Paddy Power shareholders would own 52% of the combined company, with Betfair financiers owning the staying 48%.
The combined service would have annual profits of some ₤ 1.1 bn.
"Discussions stay continuous regarding the other terms of the possible merger," a statement said on Wednesday, external.
The 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 independently owned Bet365.
Shares in Betfair skyrocketed 17% to ₤ 30.60 on Wednesday, while Paddy Power leapt more than 18% in Dublin.
If the bet9ja's welcome offer goes ahead, Breon Corcoran, manager of Betfair, would end up being president of the 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 brands in Europe.
Mr Corcoran said: "We essentially believe this promotion code market is everything about scale. By putting together two distinct but extremely 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 primary financial officer, said the combination was an "appealing opportunity".
"The scale and capability is unsurpassed and would leave us in a better location to complete in our existing markets, where competition is extreme," he said.
Given the complementary nature of the 2 companies, he was positive that any competitors issues might be overcome.
Paddy Power was established in 1988, when 3 Irish bookmakers combined. It has 350 wagering shops and is the third-largest online bookmaker.
Betfair, on the other hand, is providing a market - or wagering exchange - that lets customers bypass the yohaig code requirement for a standard bookmaker.
Based on their closing rates on Tuesday, Betfair was worth ₤ 2.4 bn and Dublin-listed Paddy Power was worth 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 betting sector in recent months.
In July, online gambling firm 888 Holdings won a takeover battle for rival Bwin.party in a cash-and-stock deal valued at about ₤ 898m.
The 2 business had been in conversations considering that the middle of May.
Ladbrokes and Gala Coral likewise recently sealed a ₤ 2.3 bn merger.
Online gambling company 888 purchases Bwin
17 July 2015
CVC racks Betfair takeover bid
14 May 2013
