Investors back Flutter’s growth ambitions with €1bn share sale
PADDY POWER owner Flutter Entertainment has raised about €1bn via an equity placing, creating a war chest which will allow it to capitalise on opportunities that arise from the Covid-19 pandemic.
It intends to use the additional financial firepower to boost its US presence, where its FanDuel division has become a major player in the sports betting industry.
Flutter also owns Betfair, has significant operations in Australia and a presence in Georgia.
Details of the outcome of the equity placing will be known today, with the newly issued shares ready to be traded next Tuesday.
The share placing has been backed by Fox. It owns a stake in Flutter Entertainment after the Irish company recently completed its acquisition of Canada’s The Stars Group, creating the world’s largest online gaming company. Fox owned a stake in The Stars Group.
“Fox is bullish about the opportunities in the digital sports wagering market,” said Lachlan Murdoch, executive chairman and CEO of Fox.
“Fox Bet has shown strong growth since launching last fall, and we look forward to continuing that success with our partner Flutter.
“Fox’s investment in Flutter underscores our confidence in Flutter’s business and its management’s ability to continue to drive leadership in the US market.”
Flutter, whose CEO is Peter Jackson, said yesterday it would place just over eight million shares at an unspecified price.
Shares in Flutter were changing hands at £106 in London yesterday. Even at £100, the more than eight million shares would equate to more than £800m (€890m). The group has a market capitalisation of £15.5bn (€17.2bn).
“The group believes that the current operating environment is likely to result in longer-term changes to the sector landscape which will lead to further opportunities,” it said.
‘Placing will better position the group to move quickly’
“The placing will better position the group to move quickly to capitalise on such opportunities should they arise, accelerating its four-pillar strategy and consolidating its market leadership positions.”
It said one potential consequence of the pandemic is that the pace of regulation for betting and gaming in the US could accelerate, as an increasing number of states look for new ways to raise additional sources of tax income.
The placing will also be used to strengthen Flutter’s balance sheet.
Davy and Goldman Sachs are managing the Flutter placing.