About €1 billion in Paddy Power stock changed hands yesterday as the bookmaker’s imminent €10 billion merger with Betfair spurred a “record” share auction on the Dublin market.

Paddy Power shares gained almost 4 per cent on the Irish Stock Exchange to close at €142.75 on the last day of trading before the merger takes effect today.

The enlarged business, to be known as Paddy Power Betfair, will be the world’s largest listed online gaming and betting company. As many as 7 million Paddy Power shares changed hands as investors manoeuvred into stock ahead of the new entity’s entry to the Morgan Stanley Composite Index (MSCI).

Included in that number were “just under 4.3 million” shares exchanged at €142.75 in the regular end-of-session closing auction, said one Dublin trader. “That’s the largest auction in any stock in the history of the Irish exchange.”

Heavy interest

While traders said the auction had been expected to draw interest in 3.8 million shares, demand was heavier than foreseen. “Money is following the stock . . . As it turned out it was a significant auction.”

The closing auction was signficant as share value set the price at which the stock joins the MSCI. The entry to the index had been expected to spur buying interest as many investors track the index as part of their strategy. Such investors would have to increase their position in the stock if they were “underweight” prior to its move onto the MSCI.

The enlarged stock’s entry to the FTSE 100 on the London market is seen as a virtual certainty when next the index is reconstituted. As it stands, the enlarged entity will be reweighed on the FTSE 250 index on the basis of its closing price tomorrow. “Wednesday’s closing auction in London [will be] another big event,” a trader said.