Betfair turns down a CA$1400m takeover
Betfair have recently released the news that they rejected an offer from CVC Capital Partners Limited (CVC) of CA$1.37 per share. It’s estimated that with 103m shares in issue, Betfair is roughly valued at CA$1400m.
On the 15th April, 2013, CVC announced that it was in discussions with Betfair about the possibility of a takeover. On the 19th April, 2013, the Board of Betfair received a preliminary proposal regarding the offer of CA$1.37 per Betfair share in cash. Betfair reviewed the proposal but rejected it on the basis that it fundamentally undervalues the company and its attractive prospects. The Board is confident in Betfair’s strategy and growth prospects as it goes through a new period of delivering the new focused strategy they announced in December 2012, and improving their financial performance.
It is common for offers to be rejected on the stock market and Gerald Corbett, Chairman of Betfair, has had much experience in these matters. In response to CVC’s proposal, Corbett released the following statement:
“We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise. Our new management team are implementing the strategy announced in December 2012 and it is this that will realise value for shareholders. We will provide an update to the market on 7th May, 2012 to set out the good progress we are making in the implementation of our strategy, including cost efficiencies, and our recent trading performance.”
Mark Davies, who runs Camberton, an issues-driven communications consultancy, spent many years running Betfair’s external affairs and has a lot of interesting comment and reflections on his blog. His views are worth a look as he is a big shareholder in the company. He offers insight to the inner workings of Betfair and its overall philosophy, and has much to say about the latest proposal rejection.
More Casino News: