Flutter To Drop $4.18B For Additional 32.7% Stake in FanDuel

Hundred Dollar Bills
Flutter increased its stake in sportsbook operator FanDuel, buying 37.2% of the company for a sum of $4.18B.

The consideration is expected to be satisfied through a combination of a $2.088B cash payment and the issuance of approximately 11.7M new Flutter shares directly to Fastball. According to Flutter, the cash portion of the agreement will be funded through cash on the balance sheet and an equity placing to raise an additional 1.1B pounds.

FOX Corporation would participate in the capital raising and in return, the US-based FOX Sports , which is owned by FOX Corporation, will be given an option to buy 18.5% of FanDuel in July 2021.

Said Flutter CEO Peter Jackson in a statement:

“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.”

Terminating Fastball’s Interest in FOX Bet

Flutter, which owns European iGaming properties Paddy Power, Betfair, and Poker Stars, acquired 57.8% of FanDuel in 2018. With the latest agreement, it will now own 95% of the top betting company in the United States and terminate Fastball’s economic interest in the online sports betting platform FOX Bet.

The deal would simplify the position of FOX Bet, in which Fastball was given an interest as part of Flutter’s merger with the Star Group of Canada in 2019. According to Flutter, the union created one of the largest online betting and gaming operator in the business.

Attractive American Scene

Flutter Entertainment said that this transaction will increase its exposure in the U.S. market materially. It described the American scene as the “most attractive” sector opportunity there is today.

The United States is viewed as the next big market in sports betting and it has led to big partnerships involving European companies. Last September, Caesars Entertainment purchased London-based William Hill for $3.9B.