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 one of the world's greatest online wagering and gaming companies.

Final information are still being worked out, however the companies stated the bet9ja's welcome offer had "compelling tactical logic" and improved their market position.

Paddy Power shareholders would own 52% of the yohaig code combined company, with Betfair investors owning the yohaig code staying 48%.

The combined company would have annual earnings of some ₤ 1.1 bn.

"Discussions remain ongoing concerning the other terms of the possible merger," a statement stated on Wednesday, external.

The new group would be the UK online market leader with a 16% share, according to industry information, passing a merged Ladbrokes/Coral on 14%, in addition to William Hill and the yohaig code privately owned Bet365.

Shares in Betfair skyrocketed 17% to ₤ 30.60 on Wednesday, while Paddy Power jumped more than 18% in Dublin.

If the bet9ja's welcome offer goes on, Breon Corcoran, manager of Betfair, would become president of the combined group, while his equivalent at Paddy Power, Andy McCue, would end up being chief operating officer.

'All about scale'

The combined company prepares to retain the "distinct and complementary" Betfair and Paddy Power brand names in Europe.

Mr Corcoran stated: "We basically think this promotion code market is all about scale. By putting together 2 unique but extremely strong brand names, we'll have a market leading position in the UK, Ireland, Australia and in the United States."

Cormac McCarthy, Paddy Power's chief financial officer, said the combination was an "attractive opportunity".

"The scale and ability is unmatched and would leave us in a better place to compete in our present markets, where competitors is intense," he said.

Given the complementary nature of the yohaig code two companies, he was confident that any competitors issues could be gotten rid of.

Paddy Power was established in 1988, when three Irish bookmakers merged. It has 350 betting shops and is the third-largest online bookmaker.

Betfair, in contrast, is using a marketplace - or wagering exchange - that lets clients bypass the need for a conventional bookie.

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 get an unique dividend of EUR80m.

There has been a flurry of merger activity in the betting sector in current months.

In July, online gambling company 888 Holdings won a takeover fight for rival Bwin.party in a cash-and-stock offer valued at about ₤ 898m.

The two business had actually been in conversations because the middle of May.

Ladbrokes and Gala Coral also just recently sealed a ₤ 2.3 bn merger.

Online gambling firm 888 buys Bwin

17 July 2015

CVC shelves Betfair takeover quote

14 May 2013