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Betfair and Paddy Power take a ₤ 5bn merger punt

26 August 2015

Betfair and Paddy Power are set to combine in a ₤ 5bn offer that would create one of the world's greatest online betting and video gaming business.

Final information are still being worked out, however the yohaig code business said the offer had "compelling strategic reasoning" and increased their .

Paddy Power investors would own 52% of the combined company, with Betfair financiers owning the remaining 48%.

The combined service would have annual revenues of some ₤ 1.1 bn.

"Discussions remain ongoing regarding the other terms of 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 industry data, passing a merged Ladbrokes/Coral on 14%, in addition to William Hill and the yohaig code privately 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, employer of Betfair, would end up being primary executive of the combined group, while his counterpart at Paddy Power, Andy McCue, would end up being primary running officer.

'All about scale'

The combined business plans to keep the "distinct and complementary" Betfair and Paddy Power brands in Europe.

Mr Corcoran said: "We basically think this promotion code market is all about scale. By creating two unique however 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 monetary officer, stated the mix was an "appealing opportunity".

"The scale and capability is unparalleled and would leave us in a far better location to compete in our existing markets, where competitors is intense," he stated.

Given the complementary nature of the 2 business, he was confident that any competition concerns might be gotten rid of.

Paddy Power was established in 1988, when three Irish bookies combined. It has 350 betting shops and is the third-largest online bookie.

Betfair, on the other hand, is offering a marketplace - or betting exchange - that lets clients bypass the need for a traditional bookmaker.

Based upon their closing rates 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 actually 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 bet9ja's welcome offer valued at about ₤ 898m.

The 2 business had actually been in conversations because the middle of May.

Ladbrokes and Gala Coral likewise just recently sealed a ₤ 2.3 bn merger.

Online gambling company 888 purchases Bwin

17 July 2015

CVC racks Betfair takeover bid

14 May 2013