Two Major Names Take a Big Flutter by Joining Forces
A massive story landed in editor’s inboxes on Tuesday morning with news that the Canadian Stars Group (TSG) is to be acquired/merged by Flutter Entertainment, operator of Betfair, Fanduel and Paddy Power via an all share combination.
This fusion, set to go ahead in the second or third quarter of 2020, will create a massive gaming entity which, in 2018, enjoyed revenues of £3.8 billion (€4.2 billion, $4.6 billion).
Following completion of the deal Flutter shareholders are set to own approximately 54.64 percent of the new company and TSG shareholders will own approximately 45.36 percent of the share capital of the combined group. It will be the world’s largest online betting and gaming company.
Announcing the planned merger in an 18 page statement the companies said that the combination is expected to deliver “substantial value creation for shareholders from pre-tax cost synergies of £140 million per annum, along with potential revenue cross-sell in international markets and lower finance costs”.
Job cuts and savings
Amongst the Stars Group is its showpiece online poker site, PokerStars (famous for their huge casino deposit bonus). An industry leader, it recently announced job cuts in its Isle of Man headquarters and Malta satellite offices. Presumably the struggling poker sites at Paddy Power and Betfair, which feed into the iPoker network will be amongst the “synergies” mentioned in the prepared statement.
Not only will the new entity will soon feature the world’s No.1 poker site, it will also encompass the No. 1 betting exchange (Betfair), one of the leading fantasy betting sites, 300 UK and Irish betting shops, millions of online sports and casino players plus the American horse and greyhound broadcaster, TVG. In fact Flutter says the new entity will have customers in more than 100 international markets.
Confident of clearing the hurdles
Flutter shares rose steeply when the London Stock Exchange opened on Tuesday morning – rising 15 percent in just one hour – following the news and after Flutter Entertainment’s chief financial officer, Jonathan Hill, said the group is “pretty confident” of getting the deal over regulatory hurdles.
“We expect to go through a process with the competition authorities. “We’re very respectful of the authorities – the CMA (Competition and Markets Authority) in the UK – and the important analysis they need to do in relation to this proposed transaction. We are confident that we will receive the relevant approvals at the appropriate time.”