Betfair shares up 12% as CVC ponders $1.1b takeover bid
The British-listed shares of Betfair rose 12 per cent on Monday after CVC, which also owns Formula One racing, said it was in talks with a Betfair investor about making a bid for the group valued at £800 million ($1.1 billion).
CVC said it had "preliminary discussions with Richard Koch, Antony Ball and partners regarding options in respect of Betfair, which could include an offer for Betfair by funds advised by CVC together with Richard Koch, Antony Ball and partners". Mr Koch holds a 6.5 per cent stake in Betfair.
Betfair acts as an online exchange that allows punters to bet against each other, rather than against Betfair, which takes a cut of each transaction.
Betfair has disappointed as a listed stock following an over-hyped public offering 2½ years ago. Despite Monday's boost, the stock is still trading 40 per cent below its float price. Betfair's Australian operations are owned in a joint venture with Mr Packer's casino operator Crown Ltd.
Mr Packer sold most of Nine and its related assets to CVC Asia Pacific for about $5 billion in cash and debt in 2007.
CVC crystalised a loss of about $2 billion last year when it was forced to hand Nine to its creditors.
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CVC Capital Partners has confirmed preliminary talks about a potential takeover bid for British-listed gambling group Betfair. The private equity firm said it was in discussions with Betfair investor Richard Koch, Antony Ball and partners about options that could include an offer by funds advised by CVC together with those partners.
Betfair shares rose 12% after CVC announced it was in talks about potentially making a takeover bid for the group. The market reacted to the possibility of an offer and the reports of CVC’s discussions with major investors.
The talks referenced a potential valuation of about £800 million, which the article notes is roughly $1.1 billion.
CVC said it had preliminary discussions with Richard Koch, Antony Ball and partners about options for Betfair. The article notes Richard Koch holds a 6.5% stake in Betfair.
Betfair operates an online betting exchange that lets punters bet against each other rather than against the house. Betfair earns revenue by taking a cut of each transaction on its exchange.
According to the article, Betfair disappointed as a listed stock after an over‑hyped public offering about two-and-a-half years ago. Even after Monday’s rally, the stock was still trading roughly 40% below its float price.
Betfair’s Australian operations are owned through a joint venture with James Packer’s casino operator, Crown Ltd, according to the article.
The article highlights CVC’s recent difficulties: the firm suffered large losses on its ownership of Nine Entertainment and crystallised about a $2 billion loss last year when it had to hand Nine to creditors. Investors may find that historical context relevant when assessing CVC’s potential approach to Betfair.
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