Bookmaker Paddy Power shareholders will receive details of its proposed €8 billion merger with rival Betfair in coming weeks, ahead of voting on the plan at an extraordinary general meeting.
The pair are planning to merge to create one of the world’s biggest gambling groups, with revenues between €1.5 billion and €2 billion a-year and a stock market value in the region of €8 billion.
In a statement on Tuesday, Paddy Power, said that it expects to publish “shareholder documentation” in the coming weeks. It is understood that this will include a prospectus and other information that it has to send to investors.
The Competition and Consumer Protection Commission’s (CCPC) investigation of the merger is due to be completed on December 1st. At that point it may decide to clear IT or move to a longer, phase two inquiry.
Separately, the UK’s Competition and Markets Authority has launched its own probe into the deal. Its deadline for submissions from interested parties is November 20th and its phase one inquiry must be completed by January 7th.
Both regulators are investigating whether the deal will substantially lessen competition in betting markets in both jurisdictions. They will have to approve the merger before it can go ahead.
The CCPC recently gave the green light for Paddy Power to take over six Galway betting shops from smaller rival, Mulholland Bookmakers. It has added 14 bookies in the Republic so far this year, bringing the total here to more than 590.
Paddy Power shareholders, due to receive 52 per cent of the merged entity, will have to approve the deal at an extraordinary general meeting (egm) which is likely to be held either shortly before Christmas or early in January.
Both sides hope that the deal will go through before the end of March next year. Under its terms, Betfair equity holders will receive 0.4254 new shares in Paddy Power for each of their shares.
Betfair’s chief executive, Breon Corcoran, will take the helm of the expanded group and his opposite number at Paddy Power, Andy McCue, will become chief operating officer.
Paddy Power yesterday stuck to its prediction that operating profits this year will grow by less than 10 per cent over 2014. Net revenue - the amount that the bookmaker won from its customers - between July 1st and November 15th was up 6 per cent on the same period last year.
A run of results that favoured punters and the fact that the Football World Cup ran through the first half of July 2014 dented net revenues in its European on-line business, which was down 9 per cent, and UK bookie shops, where sportsbetting returns fell 8 per cent.
However, its Australian business grew by 33 per cent. Net revenues in its Irish betting shops increased 4 per cent on the back of 8 per cent growth in the amounts that its customers bet during the period. Paddy Power shares closed up 2.39 per cent at €115.50 in Dublin yesterday.
