Kenneth Dart Halts Purchases of Flutter Entertainment Stock

Billionaire investor Kenneth Dart hasn’t added to his position in Flutter Entertainment (NYSE: FLUT), but that’s not necessarily a negative commentary on the stock.

The Irish Times reports that it’s been about a month since the enigmatic Dart bought shares of the FanDuel owner, representing one of his longest periods of inactivity since his involvement with the gaming stock was revealed about a year ago.

What started as a relatively small stake in the Paddy Power owner ascended to 20% as of April and now resides around 31.4%. However, it’s unlikely that Dart has activist intentions with Flutter and that’s the case for multiple reasons.

First, he doesn’t have an extensive track record of activism in the myriad companies he’s invested in. Second, as The Irish Times notes, more than a third of his stake in Flutter is by way of derivatives and swaps. Since he doesn’t directly own at least 30% of the Flutter common stock, he’s not required to make an acquisition offer as would normally be the case under Irish law.

Reading Tea Leaves on Dart’s Flutter Stock Pause

Worth an estimated $4.1 billion, Dart is famously quiet about his investments, making it difficult to parse why he’s currently standing pat on Flutter stock. However, he hasn’t been a seller of the Betfair owner’s shares.

His pause on Flutter activity may be attributable to his engagement with other gaming equities. For example, August regulatory filings indicate he took a 5.8% stake in DraftKings (NASDAQ: DKNG), Flutter’s most director competitor in the U.S.

DraftKings is almost certainly another case of Dart not angling for activism because CEO and co-founder Jason Robins controls more than 90% of the company’s super voting stock. However, it is possible that the Flutter pause coupled with the DraftKings investment are signs that Dart is looking to spread his bets among gaming equities.

Evolution Update

As was recently reported, Dart’s interest in Evolution AB exceeded 30%, requiring him to make a formal acquisition bid for the Swedish gaming company. He complied, offering $13.8 billion, but that was merely a compliance move. He made clear he doesn’t want to own Evolution outright and the board told investors to reject the offer.

A scant 0.06% of Evolution’s shares outstanding were tendered into Dart’s owner, meaning his ownership of that stock increased to 31.6%. Add in some swaps and his economic interest in the company is 33.8%.

Under Swedish law, now that offer has been rejected and the tender period is complete, Dart can build his stake in Evolution for another year before being required to make another formal takeover proposal.