Formula 1 owner CVC Capital Partners’ takeover bid of Betfair has reportedly been rejected by the sports betting exchange and online casino operator, after UK newspaper The Telegraph reported that the £912 million ($1,413,600) bid was too low.
The preliminary offer of 880 pence ($13.60) per share was received last Friday from CVC Capital Partners, as well as former director of Betfair Richard Koch, who holds a 6.5 percent stake in the casino operator already, and Antony Ball, a non-executive director at investment group Brait.
Earlier this week, Betfair stated that the online gambling operator’s board decided to reject the bid as it “fundamentally undervalues the Company and its attractive prospects.”
However, shares in Betfair rose 15 percent last week, bringing the share price to 805p and valuing the operator at around £834 million ($1,276,000), some £78 million less than CVC Capital Partners’ bid of £912 million. Clearly the owners of Betfair feel they are growing stronger and could hold out for a larger bid in the future.
“We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognize,” said Betfair chairman Gerald Corbett. “We will provide an update to the market on 7 May 2013 to set out the good progress we are making in the implementation of our strategy, including cost efficiencies, and our recent trading performance.”
Betfair announced last December that it was pulling out of markets, including Russia and Canada, putting the decision down to unclear gambling regulations. This decision was made despite the fact that these markets accounted for almost a quarter of the online operator’s revenues.
Founded in 2000 by former JP Morgan trader Ed Wray and ex-professional gambler Andrew Black, Betfair has developed a big name in the online gambling world, and has now announced that it is looking to the future confidently as it enters an exciting phase of delivering the new focused strategy announced in December.
Whether or not Betfair is holding out for a better offer, or is simply not interested in any takeover, remains to be seen. But with reputation meaning a great deal in online gambling, both to customers and prospective partners, Betfair does seem well-positioned to sustain continued growth as the market expands.