Betfair considers £140m payout to spoil CVC bid
The firm has rejected a bid proposal from CVC Capital Partners – the buyout group behind Formula 1 motor racing – on the grounds that the £910m approach undervalued its business and prospects. CVC has until 13 May to table a formal bid.
Reports yesterday indicated a one-off return of cash might appease investors unhappy with Betfair’s dismal share price performance over the last three years. Betfair is due to publish a trading update tomorrow but may opt to keep the payout option in reserve until CVC turns up the pressure.
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Hide AdThe company’s betting exchange works by matching punters and allowing them to bet against each other, which it says eliminates the need for a traditional bookmaker. It charges a commission on the bets.
The company processes seven million transactions a day and said it is going through one of the “most exciting phases in its development”, thanks to a new strategy revealed in December.
Rejecting CVC’s original 880p-a-share takeover approach, chairman Gerald Corbett said last month: “We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise.”