Online gambling house Flutter Entertainment this week closed a previously announced $ 4.2 billion deal to raise its stake in American sports betting and fantasy sports firm FanDuel to 95%.
Flutter merged its US operations with FanDuel in 2018. The Irish online gambling giant announced in early December that it would exercise an option ahead of the previously agreed schedule of July 2023 to buy a 37.2 stake. % in FanDuel.
The deal was a combination of cash and stocks. Flutter raised £ 1.1 billion from investors, including Rupert Murdoch’s Fox Corporation, to partially finance the purchase.
The stake that the online gambling operator just bought was owned by the Fastball Holdings investment consortium led by private equity firm KKR. The remaining 5% stake in FanDuel will be held by US casino operator Boyd Gaming.
Flutter plans to pay for the FanDuel stake through approximately $ 2.09 billion in cash and the issuance of nearly 11.7 million new common shares directly to Fastball Holdings.
The transaction was endorsed by 99.9% of Flutter shareholders during a meeting held on December 29, the company said.
The deal significantly increase Flutter’s exposure to the US market at a time when more and more states are embracing sports betting and online gaming, said the company’s CEO Peter Jackson. The executive went on to say that they also acquired the stake “at a significant discount to our own estimate of the intrinsic value of the business.”
Fox offered an option to acquire a stake in Flutter
As mentioned above, media giant Fox Corporation participated in raising capital for the FanDuel stake. Flutter said Fox was offered the option to buy a stake in the Irish online gambling giant in July 2021 and that he will be “in dialogue with them to see if they are interested in pursuing him or not.”
Fox had a 2.6% stake in Flutter before the latter raised its own stake in FanDuel. The FOX Sports business of the media corporation may buy 18.5% from the online gambling company next July.
Fox Corporation CEO and CEO Lachlan Murdoch said in a recent statement that “maintaining our ownership interest in Flutter signifies our long-term commitment to Flutter and the continued trust on management’s ability to execute in the face of the rapid growth opportunity in the US. ”
Mr. Murdoch went on to say that his audiences have been very committed to free sports betting content and are excited to be able to offer them access to the products from Flutter’s portfolio of brands targeting the US.
It should be noted that FOX Sports and The Stars Group, which became part of Flutter this spring, announced a sports betting and media association in May 2019 which resulted in the launch of the FOX Bet betting operation in the fall of 2019.