Shares in bookmaker Paddy Power hit a 21-month low after the unexpected announcement that chief executive Breon Corcoran is stepping down.
The company announced this morning that he would be replaced by Peter Jackson, the recently appointed chief executive of global payments group WorldPay and a director of Paddy Power Betfair. No date for the handover has been given.
The bookmaker made the announcement to the Irish Stock Exchange ahead of stock market trading Monday after weekend reports of the appointment of headhunters to find a successor for Mr Corcoran.
The shares opened 2 per cent weaker in London on Tuesday morning and quickly shed 8.6 per cent of their value cent from their Friday close to trade at 7240 pence sterling, a level not seen since October 2015. The shares subsequently recovered slightly and were trading 5.6 per cent weaker by 11am in heavy trading.
The news comes just 18 months after the £7 billion merger of Paddy Power with betting exchange Betfair. The merger has largely been deemed a success, and Mr Corcoran’s leadership has been seen as instrumental in that.
Mr Corcoran had worked with Paddy Power until 2011 when he resigned as chief financial officer to become chief executive at Betfair.
“A key attraction of the Paddy Power Betfair merger was to bring Breon Corcoran back to Paddy Power, given his enormous success with Betfair,” said David Holohan, chief investment officer at Merrion Capital, in Dublin.
“Post the merger, many senior management positions were filled with Betfair personnel, making reports of a CEO departure all the more surprising.”
The company said the Mr Corcoran had advised the board that he wished to step aside “after 16 years with the group and its predecessor companies”.
This was a very difficult decision to make, and there is never a good time to leave,” said Mr Corcoran in the company statement. “But this is the right decision for me and my family and, following the successful completion of the merger integration, it is an opportune time for the business too.”
Paddy Power chairman Gary McGann said the group had started hunting a successor “some months ago” after Mr Corcoran had approached himslef and the board about his long-term plans.
“While we will be sorry to see Breon leave, we are delighted to have appointed a candidate of Peter’s calibre to succeed him,” he said. “The board’s unanimous selection of Peter follows a thorough global search for an individual with the skills and expertise to match the ambition of the group.
“The combination of his executive expertise together with his understanding of the Paddy Power Betfair business as a non-executive director uniquely positions Peter to assume the role of CEO and lead the group in its next stage of development.”
Mr Jackson, who is currently an independent non-executive director of the company, has been chief executive of FTSE 100 global payments business WorldPay. He was only appointed to that position in March of this year.
He has previously served as chief executive of Travelex Group from 2010 until its successful sale in 2015, working subsequently with Banco Santander.
His early career was in banking with Lloyds Banking Group and HBOS.
“Peter’s start date will be confirmed in due course,” the announcement said. “Breon will continue to lead the Group in the meantime, completing the integration of the Paddy Power and Betfair businesses, and ensuring the delivery of an orderly transition.”
The group will announce interim results on Tuesday and said on Monday that it would report revenue growth of 9 per cent and underlying growth in earning before interest,t ax, depreciation and amortisation (ebitda) of 21 per cent.
The company said in its statement that it would also confirm Tuesday that trading was in line with expectations and provide guidance for full year 2017 underlying ebitda of between £445 million and £465 million.
