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Flutter: Fanduel ownership increased

Flutter has upped its ownership stake in FanDuel following a $4.2 billion deal announced late last week.

Back in 2018 Flutter bought a 58 percent stake in FanDuel Group. The monetary details of that deal were not fully disclosed at the time. Last week Flutter increased their ownership stake in FanDuel to 95 percent by purchasing a further 37 percent stake for $4.2 billion. The remaining five percent remains in the hand of Boyd Gaming, FanDuel’s market partner in the US.

How did Flutter Fanduel ownership increased?

According to the details of the new purchase Flutter will pay $2 billion in cash and the remaining $2.2 billion will be paid through 11.7 million new ordinary shares in Flutter. When the deal was announced Flutter shares skyrocketed in London, jumping 12 percent.

When Flutter signed the original deal with FanDuel in 2018 it gave them the option to acquire another 37 percent (which they just did) in two stages in July 2021 and July 2023 at current market valuations. Flutter decided to jump the gun and do the deal early at what they expect to be a discounted rate and ensure price certainty and liquidity of the deal.

Flutter CEO Peter Jackson commented on the earlier than expected sale by saying “Our intention has always been to increase our stake in the business and I’m delighted to be able to do so earlier than originally planned and at a discount to its closest peer.”

FanDuel is currently the largest operator in the American sports betting market with a reported 46 percent market share in online betting during the last quarter of 2020.

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