Flutter details £1.1bn share placing for FanDuel deal

The group that owns Paddy Power Betfair and Pokerstars said a total of approximately eight million new ordinary shares in the company have been placed by Goldman Sachs International and J&E Davy at a price of 14,000 pence per placing share. The Euro placing price, for those participants in the placing who have elected to settle in Euros, is €155.44.

The placing is set to raise gross proceeds of approximately £1.1bn, which is around a third of the $4.18bn (£3.13bn) due to be paid to Fastball for its 37.2% stake in FanDuel – raising its total stake to 95%.

Media giant Fox Corporation has committed to invest further in Flutter as part of the placing.  

The placing shares represent approximately 5.2% of Flutter’s issued share capital immediately prior to the placing, while the price represents a premium to the intra-day price at time of launch of approximately 3.4% and discount of approximately 2.1% to the closing price on 3 December 2020.

It is expected that dealings will commence in the placing shares next Tuesday (8 December).

In a statement, Flutter said: “Flutter consulted with a number of its major shareholders prior to the Placing and has respected the principles of pre-emption through the allocation process insofar as possible. The company is pleased by the strong support it has received from new and existing shareholders.”

Lachlan Murdoch, executive chairman and chief executive of Fox Corporation said : “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.”

The deal announced on Thursday will see Flutter increase its stake in FanDuel from 57.8% to 95%. Flutter then intends to offer media giant Fox Sports the option to purchase 18.5% of the brand for fair market value in July 2021.

Flutter will pay $2.09bn to Fastball – a consortium of investors headed by venture capital giant KKR – in cash for its entire stake in the business. The remainder of the deal will be paid through 11.7m Flutter shares valued at £133.50 apiece – Flutter’s share price when the market opened on Thursday.