Betfair and Paddy Power take a ₤ 5bn merger punt
26 August 2015
Betfair and Paddy Power are set to merge in a ₤ 5bn offer that would create among the world's most significant online betting and video gaming companies.
Final details are still being worked out, however the companies said the bet9ja's welcome offer had "engaging strategic logic" and enhanced their market position.
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Paddy Power investors would own 52% of the combined organization, with owning the staying 48%.
The combined organization would have annual profits of some ₤ 1.1 bn.
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"Discussions stay ongoing regarding the other regards to the possible merger," a declaration stated on Wednesday, external.
The 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 privately owned Bet365.
Shares in Betfair soared 17% to ₤ 30.60 on Wednesday, while Paddy Power jumped more than 18% in Dublin.
If the deal proceeds, Breon Corcoran, manager of Betfair, would end up being primary executive of the combined group, while his equivalent at Paddy Power, Andy McCue, would end up being primary running officer.
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'Everything about scale'
The combined company plans to keep the "unique and complementary" Betfair and Paddy Power brands in Europe.
Mr Corcoran said: "We essentially believe this promotion code market is all about scale. By creating two distinct however phenomenally strong brands, we'll have a market leading position in the UK, Ireland, Australia and in the United States."
Cormac McCarthy, Paddy Power's chief monetary officer, said the combination was an "appealing opportunity".
"The scale and capability is unsurpassed and would leave us in a much better location to complete in our existing markets, where competitors is intense," he said.
Given the complementary nature of the 2 companies, he was confident that any competitors issues might be overcome.
Paddy Power was founded in 1988, when 3 Irish bookies combined. It has 350 betting shops and is the third-largest online bookie.
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Betfair, in contrast, is providing a marketplace - or wagering exchange - that lets customers bypass the requirement for a standard bookmaker.
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Based upon their closing prices on Tuesday, Betfair deserved ₤ 2.4 bn and Dublin-listed Paddy Power was worth EUR3.4 bn (₤ 2.5 bn).
Industry mergers
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Shareholders in Paddy Power would receive a special code yohaig dividend of EUR80m.
There has actually been a flurry of merger activity in the gaming sector in current months.
In July, online betting firm 888 Holdings won a takeover battle for rival Bwin.party in a cash-and-stock bet9ja's welcome offer valued at about ₤ 898m.
The 2 business had actually remained in discussions given that the middle of May.
Ladbrokes and Gala Coral also recently sealed a ₤ 2.3 bn merger.
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Online gaming firm 888 buys Bwin
17 July 2015
CVC racks Betfair takeover bid
14 May 2013