MARKET REPORT: Investors enjoy Flutter Entertainment on news of £3bn U.S. deal

7 mins read


MARKET REPORT: Investors put their money on gambling giant Flutter Entertainment as it splashes out £3bn to up its stake in U.S. betting site

Investors put their money on Flutter Entertainment after the gambling giant unveiled plans to speed up its investment in an American sports betting site. 

The Paddy Power and Betfair owner will splash out £3.1 billion to increase its stake in Fanduel to 95 per cent several years earlier than planned. 

The deal underlines how important the US market has become for British bookmakers. 

Investors put their money on Flutter Entertainment after the gambling giant unveiled plans to speed up its investment in an American sports betting site

Investors put their money on Flutter Entertainment after the gambling giant unveiled plans to speed up its investment in an American sports betting site

Sports betting was only legalised there at a federal level in 2018 and has prompted a race for experienced companies to elbow their way into the lucrative new market. Flutter merged its US business with Fanduel in 2018 and is now exercising an option to buy a bigger chunk of the group. 

It will buy the 37 per cent stake from Fastball Holdings, a group of investors led by private equity behemoth KKR, and the remaining 5 per cent of Fanduel will be under the control of casino operator Boyd Gaming. Flutter is offering to pay a mix of £1.6 billion in cash and the rest in Flutter shares. 

To fund the takeover, Flutter will tap the market for £1.1 billion. The sports arm of Fox – which owns about 2.6 per cent of Flutter – will be among those taking part in the fundraising. 

Fox Sports has the option to buy almost a fifth of Fanduel in July next year. Fox boss Lachlan Murdoch – son of media magnate Rupert Murdoch – said that keeping its stake in Flutter signifies its ‘long-term commitment in Flutter, and ongoing confidence in management’s ability to executive against the fast-growing US opportunity’. 

Ticketing website Trainline also made gains, rising 1.7 per cent, or 7.8p, to 471.2p, despite finance boss Shaun McCabe flogging £2.9 million of shares

Ticketing website Trainline also made gains, rising 1.7 per cent, or 7.8p, to 471.2p, despite finance boss Shaun McCabe flogging £2.9 million of shares

FTSE100-listed Flutter’s other shareholders were similarly enthusiastic about the arrangement – with shares rallying 7 per cent, or 935p, to 14300p. Flutter’s jump helped push the FTSE 100 higher by 0.4 per cent, or 26.88 points, to 6490.27, by the close. 

The blue-chip index was also bolstered by a surge in mining shares as traders bet on the chances of a global economic recovery next year. Mining company shares tend to track optimism about economic growth, as countries consume and use more raw materials when things are on the up. 

STOCK WATCH: Eve Sleep 

Eve Sleep shares bounced 9.1 per cent, or 0.4p, to 4.8p after the group revealed it sold a mattress every three minutes on average on Black Friday. It took in £1.1 million on the bumper shopping day alone – 45 per cent higher than in 2019. The AIM-listed group has raised its estimates for annual turnover again to £24 million and said losses will narrow more than 75 per cent to £2.5 million. Mattress sales have soared this year as many sought to upgrade their homes during months-long lockdowns. ■

And BT shares rose 6.4 per cent, or 8.1p, to 134.5p as the company’s plan to roll out cutting-edge fibre broadband across the UK received a major boost. Melanie Dawes, the boss of telecoms regulator Ofcom, said the firm was unlikely to face any price controls on fibre services until 2031 at the earliest, ensuring there is ‘a compelling investment case’. 

Her comments came after Philip Jansen, BT’s boss, vowed to spend £12 billion upgrading the connections of 20m homes – but warned that his company would only press ahead if it had a chance of recouping the investment. 

The FTSE250 rose 1.3 per cent, or 254.67 points, to 20132.44, as stocks that fell prey to lockdown sell-offs including Cineworld (up 14.5 per cent, or 9.24p, to 73p), Easyjet (up 5.1 per cent, or 44.6p, to 917.2p), Carnival (up 6.2 per cent, or 86.5p, to 1475.5p) and 4imprint Group (up 6.5 per cent, or 175p, to 2850p) all advanced. 

Ticketing website Trainline also made gains, rising 1.7 per cent, or 7.8p, to 471.2p, despite finance boss Shaun McCabe flogging £2.9 million of shares. McCabe, who has been with the group since 2016, sold 600,000 at an average price of about 480p. 

But Hochschild Mining was rocked by chairman Eduardo Hochschild putting a 12 per cent stake in the company up for sale – though he still owns about 38 per cent of the gold and silver miner. 

JPMorgan placed 61.7m shares in the gold miner at 200p – a £123 million stake – at a 16 per cent discount to its closing share price the day before. Its stock fell by almost that amount last night, tumbling 11.5 per cent, or 26.8p, to 207p.

Leave a Reply

Your email address will not be published.

Previous Story

How old is Shane Richie and who’s the I’m A Celebrity contestant’s wife?

Next Story

White Christmas now odds-on after freezing flakes of snow fall across the North

Latest from Blog