CVC looking at takeover bid for Betfair
The UK-listed shares of Betfair jumped 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.
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 after an overhyped public offering 2½ years ago. Despite Monday's boost, the stock is still trading 40 per cent below its flotation 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 crystallised a loss of about $2 billion last year when it was forced to hand Nine to its creditors after the media group's heavy debt load left it on the verge of collapse.
Crown reported a $3.1 million profit on its share of Betfair last year, which included a GST refund. The previous year Crown reported a $2.5 million loss on Betfair.
The Australian business has suffered from a dispute over how much it should pay for thoroughbred racing product.
It has claimed that a fee based on percentage of turnover unduly affects the business, which operates on a lower margin than other wagering businesses.
The main parties who have actually benefited from Betfair's local operations are rival online bookmakers such as Tom Waterhouse and Centrebet.
Legal proceedings Betfair launched in the Federal Court in 2008 led to the lifting of a ban that prevented bookmakers advertising in states where they were not licensed.
This opened the floodgates on advertising and sponsorship of the AFL and rugby league, which is now generating so much controversy.
Frequently Asked Questions about this Article…
CVC Capital Partners has confirmed it held preliminary discussions with Betfair investors Richard Koch, Antony Ball and partners about options for the group, which could include an offer by funds advised by CVC together with those investors. The talks related to a potential takeover of Betfair valued at about £800 million.
UK-listed Betfair shares rose about 12% after CVC announced it was in talks with key Betfair investors about making a bid. Market reaction was driven by the possibility of a buyout and the reported valuation of the group.
The takeover discussions mentioned in the article put a potential valuation on Betfair at roughly £800 million.
Betfair operates an online betting exchange that lets punters bet against each other rather than against the house. Betfair generates revenue by taking a commission — a cut — from each transaction on the exchange.
According to the article, Betfair disappointed as a listed stock after an overhyped public offering about two and a half years ago. Even after the recent share boost, the stock was still trading around 40% below its flotation price.
Betfair's Australian operations are run through a joint venture with James Packer’s casino operator, Crown Ltd. Crown reported a $3.1 million profit on its share of Betfair last year (which included a GST refund), after reporting a $2.5 million loss the previous year.
The Australian business has struggled with a dispute over how much it should pay for thoroughbred racing product. Betfair has argued that a fee based on a percentage of turnover unduly affects its lower-margin business, and rival online bookmakers have been among the firms benefiting from the local operations.
Yes. Legal proceedings Betfair brought in the Federal Court in 2008 resulted in lifting a ban that prevented bookmakers advertising in states where they were not licensed. That decision opened the way for increased advertising and sponsorship of AFL and rugby league, which the article says has become controversial.
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