A consortium led by US private equity giant KKR has generated about £1.56 billion (€1.77 billion) selling down almost all of its shares in Flutter Entertainment in the past two years, including money raised from another stock placing this week.
The investor group, known as Fastball Holdings, is believed to retain a stake worth less than £65 million, indicating that it made little by way of a capital gain since it received an initial 6.7 per stake in Flutter in late 2020 as part of a deal that upped the Irish company’s presence in the US market.
Fastball received more than 11.7 million shares, at a value of £1.56 billion, and cash of a similar amount in 2020 as it sold a 37.2 per cent stake in the US sports-betting company FanDuel to Flutter for a total consideration of £3.13 billion. That transaction lifted Flutter’s stake in the business to 95 per cent.
Flutter Entertainment
The Fastball Holdings consortium is also made up of CapitalG, the investments arm of Google’s parent Alphabet, NBC Sports Group, Comcast Ventures, Verizon Ventures and Shamrock Capital.
This week’s share sale enable Fastball to generate €328 million through the placing of 2.2 million shares at £149.10 each.
Dublin-headquartered Flutter Entertainment, the owner of Paddy Power, Betfair, Sky Bet, FanDuel and Sportsbet in Australia, said in February that it was looking at taking on a stock market quotation in the US, home of its fastest-growing business.
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The merger of Paddy Power with Betfair in early 2016 meant the combined entity opted for London for its main listing —before it changed its name to Flutter. It has a secondary listing in Dublin.
The expectation is that Flutter will eventually move its main listing to the US — similar to a plan being pursued by CRH, the building materials giant.
Huge success
CRH, which moved its main listing from Dublin to London a decade ago, confirmed to The Irish Times last week that it plans to drop its quotation on the Irish market in order to give it a better chance of it being added to key US stock market indices. The company is known to be chasing inclusion in the S&P 500 index, which is widely followed by US institutional investors.
Flutter said in a circular sent to investors ahead of its upcoming annual general meeting on April 27th that it “would like to maintain the flexibility” to continue to trade on both the London Stock Exchange and Euronext Dublin following a US listing, either on the New York Stock Exchange or the Nasdaq. This is expected to take place by the end of the year, it said.
The huge success of FanDuel, in which Flutter accumulated its stake since the US supreme court moved in May 2018 to strike down a federal law banning commercial sports betting, is gradually pulling Flutter’s centre of gravity across the Atlantic. The US accounted for a third of total revenues last year of £7.7 billion.
An 87 per cent surge in US revenues to £2.6 billion left that division as Flutter’s biggest. The group’s pretax losses narrowed to £305 million last year from £412 million for the previous financial period.
