Betfair and Paddy Power take a ₤ 5bn merger punt
26 August 2015
Betfair and Paddy Power are set to merge in a ₤ 5bn deal that would develop among the world's most significant online betting and video gaming companies.
Final details are still being worked out, but the companies said the bet9ja's welcome offer had "compelling tactical logic" and enhanced their market position.
Paddy Power investors would own 52% of the yohaig code combined business, with Betfair financiers owning the staying 48%.
The combined company would have yearly profits of some ₤ 1.1 bn.
"Discussions remain continuous relating to the other terms of the possible merger," a statement said on Wednesday, external.
The new group would be the UK online market leader with a 16% share, according to market information, passing a merged Ladbrokes/Coral on 14%, in addition to William Hill and the independently owned Bet365.
Shares in Betfair skyrocketed 17% to ₤ 30.60 on Wednesday, while Paddy Power jumped more than 18% in Dublin.
If the offer goes ahead, Breon Corcoran, manager of Betfair, would become president of the combined group, while his equivalent at Paddy Power, Andy McCue, would end up being primary operating officer.
'All about scale'
The combined company prepares to keep the "distinct and complementary" Betfair and Paddy Power brand names in Europe.
Mr Corcoran said: "We basically believe this promotion code market is everything about scale. By assembling two unique but extremely strong brand names, we'll have a market leading position in the yohaig code UK, Ireland, Australia and in the United States."
Cormac McCarthy, Paddy Power's primary monetary officer, said the yohaig code mix was an "appealing chance".
"The scale and ability is unparalleled and would leave us in a much better location to compete in our present markets, where competition is intense," he said.
Given the complementary nature of the two business, he was confident that any competitors issues could be overcome.
Paddy Power was established in 1988, when three Irish bookmakers combined. It has 350 wagering shops and is the third-largest online bookmaker.
Betfair, on the other hand, is offering a marketplace - or wagering exchange - that lets customers bypass the need for a conventional bookmaker.
Based on 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 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 offer valued at about ₤ 898m.
The two business had remained in discussions given that the middle of May.
Ladbrokes and Gala Coral likewise just recently sealed a ₤ 2.3 bn merger.
Online gaming company 888 purchases Bwin
17 July 2015
CVC racks Betfair takeover quote
14 May 2013
