Flutter Entertainment Now Owns 95% of FanDuel
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Flutter Entertainment has almost full control over daily fantasy sports specialist FanDuel after spending £3.131 billion ($4.175 billion) to acquire FanDuel’s parent company’s entire 37.2% stake.
The acquisition was made public last week when Flutter, owners of the Paddy Power Betfair brand and The Stars Group among others, released a statement to the London Stock Exchange. Flutter already held a 57.88% stake in FanDuel and signed an agreement to buyout Fastball, FanDuel’s parent company, with two further transactions in 2021 and 2023.
Those additional payments have been brought forward with Flutter agreeing to pay Fastball £3.131 billion for their holding, taking Flutter’s stake to 95%. Regional casino partner Boyd Gaming owns the remaining 5%.
It’s a move that benefits Flutter’s media partner, FOX, who currently holds a 2.6% stake in Flutter. Terms of the early buyout dictate FOX has the option to increase its stake in Flutter to 18.5% in July and will only have to pay a “fair market rate.”
Flutter is financing the deal with $2.08 billion cash and approximately 11.7 million new shares in Flutter.
Flutter CEO Thanks Former Partners
Peter Jackson, Flutter’s CEO, thanks his former FanDuel partners in a statement to the London Stock Exchange.
“Flutter’s initial acquisition of a controlling stake in FanDuel in 2018 has been transformational for the shape of the Group. Our number one position in the crucial US market is built on many of the assets we acquired through that transaction, supported by the broader Group’s capabilities. Our intention has always been to increase our stake in the business and I’m delighted to be able to do so earlier than originally planned and at a discount to its closest peer.”
“I would like to take this opportunity to thank our partners in Fastball for their tremendous support over the last 2.5 years and for their ongoing commitment to Flutter as soon-to-bet shareholders in the wider group. We look forward to continuing to grow our US business, alongside our key media partner FOX, as further states move to regulate sports betting and gaming.”
Investors Happy With The Deal; Flutter Share Price Soars
The accelerated acquisition makes perfect sense for Flutter who want a larger piece of the action in the emerging sports betting market in the United States. Legislation passed recently allowing individual states to legalise sports betting. Flutter had a relatively minor presence in the U.S. but FanDuel is a household name, one that already offers sports betting and online casino play.
It has owned a 61% controlling stake in FanDuel since May 2018 when it paid $158 million to merge its U.S assets into FanDuel.
FanDuel now has the might of Flutter, the largest gambling company in the world, behind it while Flutter has control of a trusted and respected brand for its U.S operations.
Investors in Flutter reacted extremely positively to the news. Flutter shares traded at 13,365 pence per share at the close of trading on December 2. They closed at 14,180 pence per share the day of the announcement and are currently available at 15,080 pence per share. Those shares give Flutter a massive Market Capitalisation (effectively its value) of £23.4 billion.