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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 bet9ja's welcome offer that would produce one of the world's biggest online wagering and gaming companies.

Final details are still being worked out, however the companies stated the bet9ja's welcome offer had "engaging tactical reasoning" and improved their market position.

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

The combined company would have yearly of some ₤ 1.1 bn.

"Discussions remain continuous relating to the other regards to the possible merger," a statement stated on Wednesday, external.

The brand-new group would be the UK online market leader with a 16% share, according to industry information, passing a merged Ladbrokes/Coral on 14%, in addition to William Hill and the independently owned Bet365.

Shares in Betfair soared 17% to ₤ 30.60 on Wednesday, while Paddy Power leapt more than 18% in Dublin.

If the deal goes on, Breon Corcoran, manager of Betfair, would become president of the combined group, while his equivalent at Paddy Power, Andy McCue, would end up being chief operating officer.

'All about scale'

The combined company prepares to keep the "distinctive and complementary" Betfair and Paddy Power brand names in Europe.

Mr Corcoran said: "We fundamentally believe this promotion code market is everything about scale. By creating two 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 primary financial officer, stated the mix was an "attractive chance".

"The scale and capability is unsurpassed and would leave us in a far better location to complete in our existing markets, where competition is intense," he said.

Given the complementary nature of the two companies, he was confident that any competition issues could be gotten rid of.

Paddy Power was founded in 1988, when 3 Irish bookies combined. It has 350 wagering stores and is the third-largest online bookmaker.

Betfair, on the other hand, is providing a market - or wagering exchange - that lets consumers bypass the requirement for a conventional bookie.

Based upon their closing prices on Tuesday, Betfair was worth ₤ 2.4 bn and Dublin-listed Paddy Power deserved EUR3.4 bn (₤ 2.5 bn).

Industry mergers

Shareholders in Paddy Power would get a special code yohaig dividend of EUR80m.

There has actually been a flurry of merger activity in the gambling sector in recent months.

In July, online gambling firm 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 been in discussions because the middle of May.

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

Online betting firm 888 buys Bwin

17 July 2015

CVC racks Betfair takeover quote

14 May 2013