Paddy Power owner to seek view from shareholders ‘immediately
Flutter, the world’s largest listed gambling company, is considering a US listing as it looks to consolidate its position in the growing American market.
The FTSE 100 company, which owns Paddy Power and FanDuel, said that its board had reached the view that “an additional US listing of Flutter’s ordinary shares will yield a number of long-term strategic and capital market benefits”.
The company will consult shareholders on the proposal, before potentially taking it to a vote at its annual meeting in April, which would require a 75 per cent approval rate. It said the move would “take precedence” over a previously mooted IPO of FanDuel in the US.
The betting group said the US was now its largest country by revenue and that a listing would enable Flutter to expand its profile in the country, allowing it to access US capital markets and attract local talent with share incentives.
It would also leave the door open to shifting its primary listing from London to the US in the future.
The company had considered a separate listing of FanDuel, but this was complicated by the fact that Fox, the Murdoch-owned media corporation, could claim its option to buy almost 20 per cent of the company. An IPO could not take place “without Fox’s consent or approval from the arbitrator”, according to Fox, but Flutter denied that Fox could block an IPO.
Flutter said that the location for the listing would be determined after discussions with shareholders, but it would be between the NYSE and the Nasdaq.
The news comes as Flutter, along with competitors such as 888, are being hit with heavier regulation in the UK and Ireland as governments seek to tackle problem gambling.
Flutter’s group revenues were up 11 per cent to £3.4bn in the six months to June 30, driven by strong results in the US. The group acquired FanDuel for $158mn in 2018, which was valued at $22bn in November. FanDuel has said it will be profitable by its full-year 2023 earnings.
The US Supreme Court struck down a federal ban on sports betting in 2018 kicking off a race between gambling companies to grab market share in a relatively immature and lucrative market.
Analysts at Jefferies said that the “move makes sense”, adding that they would expect a “premium valuation” for the company in the US. Analysts at Davy Research also viewed the announcement “positively”, adding that it would allow access to “new US domestic investors as well as enhancing liquidity”.
Flutter’s FanDuel bet heavily on the Super Bowl, airing a $7mn 30-second commercial and offering $10mn of free bets to qualifying customers. Its chief executive, Amy Howe, told CNN that they were expecting about 17mn bets on the game.