Irish bookmaker Paddy Power Betfair it has completed the first part of the massive £500 million buyback scheme, which began in May. The group announced on Monday that its broker Goldman Sachs purchased £200 million in shares back from investors, with the second tranche of £300 million already commenced.
In May, the gambling and betting giant Paddy Power Betfair started a plan for returning £500 million to its shareholders. The group said it would cancel all repurchased shares. In a 21 August announcement, it reported that Goodbody Stockbrokers UC had purchased a total of 44,510 in ordinary shares on the London Stock Exchange and the Irish Stock Exchange. This transaction was part of the second tranche of £300 million, which is now being undertaken by Irish stockbroking firm Goodbody. Goldman Sachs had already bought back a total of 2,429,174 of ordinary shares worth £200 million for Paddy Power Betfair.
Earlier this month, the bookmaker published its interim results for the six months ending 30 June 2018, reporting a year-on-year increase in revenue of 5 per cent to £867 million. According to Paddy Power Betfair Chief Executive Peter Jackson, the past few months were very successful for the company, which despite the flat revenue in the first quarter, had a double-digit growth from April through June. In the second quarter, the company reported revenue growth (in constant currency) in all operating divisions.
Online revenue increased 13 per cent, while the growth in retail was only 6 per cent up from the previous period. The divisions in Australia and the United States saw a huge revenue growth of 19 and 20 per cent, respectively. The company also says it managed to popularize even more its Paddy Power brand while establishing Sportsbet as a market leader in Australia and adding FanDuel to its brand portfolio in the US.
FanDuel Co-Founders Sue Paddy Power Betfair
Last week, US tech site Recode reported that one of the co-founders of fantasy sports operator FanDuel had filed a lawsuit against Paddy Power Betfair for undervaluing the company before the May $465 million acquisition. According to former CEO Nigel Eccles, he and his wife and former CMO Lesley Eccles, former CPO Tom Griffiths and corporate advisor Rob Jones are owed around $120 million. Their representatives, Recode writes, have filed a Scottish court order against the Irish bookmaker.
The transaction was purposely undervalued, according to plaintiffs. FanDuel’s board of directors are accused of not taking into consideration the repeal of the PASPA law. The founders of the fantasy sports company say that after lifting the federal ban on sports betting, the market conditions in the US changed drastically. This should have to increase FanDuel’s enterprise value, plaintiffs add, according to the full lawsuit, which was also published.
The $465 million takeover deal was completed in July, but neither company founders neither ordinary shareholders received money from the sale, Eccles claims. Fanduel’s current CEO Matt King and the executive team, however, won millions after the acquisition on the basis of a clause, according to which preferential shareholders in the transfer had to be paid first.
- Author
Olivia Cole
