Flutter Invests Further in FanDuel to Increase Stake to 95 Per Cent

December 31, 2020

Flutter Entertainment has increased its stake in U.S. fantasy sports company FanDuel to 95 per cent with the accelerated acquisition of outstanding units from Fastball Holdings.

The company had previously announced a US$4.175 billion (C$5.325 billion) conditional agreement to acquire the 37.2 per cent interest previously owned by Fastball and gain almost full ownership of the thriving FanDuel brand. Under terms of the deal, Flutter will pay C$2.667 billion in cash and issue about 11.7 million new Flutter ordinary shares to Fastball under the conditional agreement, taking its stake in FanDuel to 95 per cent from 57.8 per cent. The deal gives FanDuel an estimated enterprise value of around C$14.3 billion.

Peter Jackson, Flutter’s chief executive, said earlier in December: "Flutter’s initial acquisition of a controlling stake in FanDuel in 2018 has been transformational for the shape of the group. Our number one position in the crucial U.S. market is built on many of the assets we acquired through that transaction, supported by the broader group’s capabilities. 

"Our intention has always been to increase our stake in the business and I’m delighted to be able to do so earlier than originally planned and at a discount to its closest peer. I would like to take this opportunity to thank our partners in Fastball for their tremendous support over the last two and a half years and for their ongoing commitment to Flutter as soon-to-be shareholders in the wider group. 

"We look forward to continuing to grow our US business, alongside our key media partner Fox, as further states move to regulate sports betting and gaming."

Earlier this week, 99.9 per cent of Flutter shareholders had voted in favour of pushing forward with the deal. The global gaming and sports betting group had raised nearly C$2 billion from investors including Fox Corporation.

Lachlan Murdoch, executive chairman and CEO of Fox Corporation, commented: "We are delighted to participate in this capital raising. Maintaining our ownership stake in Flutter signifies our long-term commitment to Flutter, and ongoing confidence in management’s ability to execute against the fast growing US opportunity.

"Fox’s audiences have proven to be highly engaged with free to play and wagering content, and we are excited to offer them access to products from Flutter’s market leading stable of US brands."

SOURCE: Bloomberg