BREAKING – Betfair Reject CVC Bid

The board of directors at Betfair have rejected the £912 million offer from CVC, claiming the offer “undervalued” the company.

This is despite current shares valuing the company at approximately £840 million. Ironically, the shares saw one of the biggest jumps in their IPO history when CVC announced the offer, when they leapt up by an astonishing 35 points (4.4%).

The Betfair board summed up their rejection of the offer by stating they are “confident in the company’s strategy and growth prospects as it goes through an exciting stage”.

But of course, the question on everyone's lips is, will CVC make a counter offer? Betfair are due to provide a further market update on 7th May 2013.

For the full details on the Betfair share position, visit The Telegraph. Plus, you can read a full review of the Betfair Casino here.

Got Shares In Betfair?

There is a chance that Betfair’s troubled three years on the stock market could be coming to an end, if the latest reports in the financial media are to be believed. Private equity firm CVC is said to be considering a takeover offer though to be worth an estimated £800 million, which has caused Betfair’s usually floundering share price to rocket by 12% at its peak yesterday (as reported by the WSJ). Although there has been no confirmation by Betfair bosses or by CVC executives that a bid is in the offing, industry gossip has nevertheless leaked the news, seeing it as a rescue for a company, who, by their own admission has “lost their way”.

The current Chief Executive (the latest in a long line of CEOs trying to save the ailing brand), Breon Corcoran, who joined Betfair from Irish rival Paddy Power in early 2012, made the comment shortly after his appointment, and has since taken several drastic steps to try and reduce its shortcomings. These steps include pulling out of the troubled Greek and Cypriot markets and backing out of Germany due to on-going license problems. However, the share price has continued to tumble, nevertheless, with shares losing half their value since the flotation in late 2010.

But what does this mean for the Betfair shareholder? Shareholders were promised the moon when the company first floated – with an IPO valuation of 30 times historic earnings, they had to be. Huge, rapid expansion never materialised, and large chunks of the company have been sold off. Nevertheless, Betfair offers a unique betting platform and is a cash rich brand with lots of potential – providing they can turn around their fortune.

CVC could bring its own benefits to the brand however. The private equity firm owns the Formula One motor racing brand, as well as gym chain Virgin Active and the parent company of Madame Tussards. Plus, they already have experience in the gambling sector, having bought William Hill in 1999 and selling three years later.

If you have shares in Betfair, you are advised to stay up to date with the latest developments from both Betfair and CVC, and think carefully about your own interests. CVC cannot tender a bid unless all the shareholders agree, and the result must be right for the future of the firm. With 39% of Betfair shares still owned by four shareholders (including Richard Koch and Antony Ball) it would look like any potential bid for the company will see stiff negotiations, given the potential which still exists for the brand. If CVC are expecting Betfair to be an easy buy, they could be sadly mistaken.

If you are a casino player and have never played at Betfair before, take a read of an independant online casino review here to find out what all the fuss is about.

Should I be Buying Shares in 888 Holdings?

We don’t usually cover share prices in this blog, but with the recent news announcing the legalisation of online gambling in Nevada, New Jersey and Delaware, there has been a flurry of speculation about how the burgeoning US market could affect the online gaming industry around the world – specifically with regards to poker. With the subsequent announcement that 888 Holdings has partnered up with an investment group, Avenue Capital, to launch the All American Poker Network (AAPN) (read more about that here), initially operating from Treasure Island Casino in Las Vegas, all UK eyes are on two things – the poker traffic and the share price.

888 Holdings – Poker Traffic and Share Price 

888 Poker currently ranks fifth on the PokerScout.com online traffic report, with an average of 2,450 real money ring game players over the last seven days. 888 reported in April 2012 that their poker revenue had increased from $11 million to $21 million in the first quarter like for like periods, and that their poker platform saw a whopping 83% increase in traffic from 2011-12.

Certainly, there is every chance we could see them becoming an even more formidable force, if their real money hands increased to such a level they could catapult into the Top Three. The iPoker Network, currently in fourth place with 3,200 games on average and PartyPoker, with 3,300, are separated by a hairs’ breadth, and it wouldn’t take much of an increase from US traffic to see 888 overtake these two brands.

Interestingly enough, Full Tilt are holding onto second place behind industry giant PokerStars by just 50 hands more than Party Poker (3,350). It is unlikely that Full Tilt will be allowed back into the US online poker market after the events of Black Friday (read more about what happened here), so their current level of traffic is unlikely to increase with the new legislation.

All this is good news for online poker sites like 888, who are new to the USA and are establishing formidable partnerships with key US casino operators, as it means there is an untapped market of old Full Tilt players just waiting to play again.

888 Holdings as a whole is benefiting from the potential of this sunny outlook. Share prices reached a record high on 7th March 2013, after the announcement of the legalisation of online poker in Nevada and New Jersey, topping 183.31. This is an increase of a massive 207.41% in the last year – a phenomenal increase.


You can see a screenshot of the Share Summary below, just to give you an idea of which way the line is going!:

All this, and the first US hand has not even been dealt yet? It sure looks like a good time to invest in 888 Holdings. Lets just hope the US poker market doesnt turn out to be a damp squib, as some analysts are prophesising.

William Hill’s Buyout of Playtech Confirmed Today

The buyout deal between William Hill and Playtech has been confirmed, at a cost of £424 million. The deal will see Playtech relieved of its 29% share in William Hill Online, and will see William Hill complete its second major acquisition in less than three months, after it announced the purchase of Australian Sportingbet back in December. The move will mark a major turning point in the history of the bookmaker, as they not only take full control of their online interests but also continue their spread into other international betting markets.

Around £375 million towards the buyout will be raised by a fully underwritten Rights Issue, at the rate of two shares to every nine existing shares (equating to 245p per share), and another £50 million will be raised from the 2012 Bridge Credit Facility. According to a press release given by William Hill CEO Ralph Topping, he is confident with the terms, and “pleased with the indications of support from shareholders”, and has declared the Rights Issue is the most “appropriate” way to raise the funds.

Playtech are also happy with the proposed deal, despite initial worries that the acquisition of Sportingbet would cause tension between the parties. The end of this relationship, which begun four years ago at an estimated cost of £250 million under previous Playtech majority shareholder Teddy Sagi, will see Playtech bag a healthy profit for the start of 2013.

Playtech saw their gross income increase by a whopping 51% in 2012 thanks to their increased profits which came from their William Hill interest, yet current Chief Executive Mor Weizer is confident the move is coming at the right time, and that the Board “looks forward to 2013 with confidence.”

All is good for Will Hill however, as the buyout annoucement has seen William Hill's shares shoot up by +25 points today. Track them here.