Posted on: May 30, 2020, 01:03h.
Last updated on: May 30, 2020, 01:03h.
Fox Corp. (NASDAQ:FOXA) is boosting its stake in Betfair and PaddyPower parent Flutter Entertainment as the world’s largest online gaming company said earlier this week it’s selling $1 billion worth of equity in a secondary offering.
Flutter, which also owns FanDuel, among other internet betting platforms, said it’s selling 8.05 million shares at an almost five percent discount to the Thursday, May 28 closing price. Fox confirmed its buying into that offering, but the amount of shares being acquired by the broadcast company wasn’t revealed.
FOX is bullish about the opportunities in the digital sports wagering market. FOX Bet has shown strong growth since launching last fall, and we look forward to continuing that success with our partner, Flutter,” said Fox CEO Lachlan Murdoch in a statement.
Fox’s relationship with Flutter comes by way of the former paying $236 million to purchase almost five percent of The Stars Group (TSG) in May 2019 to bolster its FoxBet brand. Earlier this month, Flutter put the finishing touches on its $12.2 billion takeover of TSG, a deal that creating the biggest online gaming company in the world.
FanDuel Could Be The Reason
With iGaming and online and mobile sports wagering viewed as the next big growth frontiers in the industry, FanDuel could be the impetus for Fox increasing its investment in Flutter.
Under the terms of Flutter’s merger agreement with TSG, Fox can raise its stake in FanDuel to as much as 18.5 percent by 2021. That could serve as a replacement for the investment in DraftKings (NASDAQ:DKNG) the broadcaster let go of when it sold its 21st Century Fox and various FX networks to Walt Disney (NYSE:DIS) last year.
The US is the world’s fastest-growing sports wagering market and much of that growth is attributable to the emergence of mobile and online betting – arenas where DraftKings and FanDuel control enviable positioning.
“FOX’s investment in Flutter underscores our confidence in Flutter’s business and its management’s ability to continue to drive leadership in the U.S. market,” said Murdoch.
Good Timing for Flutter
Flutter’s share sale announcement comes as gaming stocks, particularly those with iGaming and sports betting exposure, are soaring off their March lowers, indicating the UK-based company is getting favorable pricing on the offering.
The operator said the current market environment is likely to result in dramatic, long-term industry shifts, which will open new doors, adding that an increased capital position allows it to capitalize on those opportunities. Flutter also said the capital raise will aid in its quest to increase its US footprint.
“Flutter believes that one potential consequence of the Covid pandemic ist hat the pace of regulation in the US could accelerate, as an increasing number of US states look for new ways to raise additional sources of tax income,” said the company. “Flutter is determined to give its US business the best possible platform for future success and to replicate the leadership position it has achieved in the states that have regulated to date.”
source https://casinonewsblogger.com/flutter-is-selling-equity-fox-ups-stake-in-bid-to-win-us-betting-share/
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