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| Version 3 | Version 4 |
|---|---|
| Betfair and Paddy Power take a £5bn merger punt | Betfair and Paddy Power take a £5bn merger punt |
| (about 5 hours later) | |
| Betfair and Paddy Power are set to merge in a £5bn deal that would create one of the world's biggest online betting and gaming companies. | Betfair and Paddy Power are set to merge in a £5bn deal that would create one of the world's biggest online betting and gaming companies. |
| Final details are still being worked out, but the companies said the deal had "compelling strategic logic" and boosted their market position. | Final details are still being worked out, but the companies said the deal had "compelling strategic logic" and boosted their market position. |
| Paddy Power shareholders would own 52% of the combined business, with Betfair investors owning the remaining 48%. | Paddy Power shareholders would own 52% of the combined business, with Betfair investors owning the remaining 48%. |
| The combined business would have annual revenues of some £1.1bn. | The combined business would have annual revenues of some £1.1bn. |
| "Discussions remain ongoing regarding the other terms of the possible merger," a statement said on Wednesday. | "Discussions remain ongoing regarding the other terms of the possible merger," a statement said on Wednesday. |
| The new group would be the UK online market leader with a 16% share, according to industry data, passing a merged Ladbrokes/Coral on 14%, as well as William Hill and the privately owned Bet365. | The new group would be the UK online market leader with a 16% share, according to industry data, passing a merged Ladbrokes/Coral on 14%, as well as William Hill and the privately owned Bet365. |
| Shares in Betfair soared 17% to £30.60 on Wednesday, while Paddy Power jumped more than 18% in Dublin. | Shares in Betfair soared 17% to £30.60 on Wednesday, while Paddy Power jumped more than 18% in Dublin. |
| If the deal goes ahead, Breon Corcoran, boss of Betfair, would become chief executive of the combined group, while his counterpart at Paddy Power, Andy McCue, would become chief operating officer. | If the deal goes ahead, Breon Corcoran, boss of Betfair, would become chief executive of the combined group, while his counterpart at Paddy Power, Andy McCue, would become chief operating officer. |
| 'All about scale' | 'All about scale' |
| The combined company plans to retain the "distinctive and complementary" Betfair and Paddy Power brands in Europe. | The combined company plans to retain the "distinctive and complementary" Betfair and Paddy Power brands in Europe. |
| Mr Corcoran said: "We fundamentally believe this industry is all about scale. By putting together two distinct but phenomenally strong brands, we'll have a market leading position in the UK, Ireland, Australia and in the United States." | Mr Corcoran said: "We fundamentally believe this industry is all about scale. By putting together two distinct but phenomenally strong brands, we'll have a market leading position in the UK, Ireland, Australia and in the United States." |
| Cormac McCarthy, Paddy Power's chief financial officer, said the combination was an "attractive opportunity". | |
| "The scale and capability is unsurpassed and would leave us in a much better place to compete in our current markets, where competition is intense," he said. | |
| Given the complementary nature of the two companies, he was confident that any competition concerns could be overcome. | Given the complementary nature of the two companies, he was confident that any competition concerns could be overcome. |
| Paddy Power was founded in 1988, when three Irish bookmakers merged. It has 350 betting shops and is the third-largest online bookmaker. | Paddy Power was founded in 1988, when three Irish bookmakers merged. It has 350 betting shops and is the third-largest online bookmaker. |
| Betfair, in contrast, is offering a marketplace - or betting exchange - that lets customers bypass the need for a traditional bookmaker. | Betfair, in contrast, is offering a marketplace - or betting exchange - that lets customers bypass the need for a traditional bookmaker. |
| Based on their closing prices on Tuesday, Betfair was worth £2.4bn and Dublin-listed Paddy Power was worth €3.4bn (£2.5bn). | Based on their closing prices on Tuesday, Betfair was worth £2.4bn and Dublin-listed Paddy Power was worth €3.4bn (£2.5bn). |
| Industry mergers | Industry mergers |
| Shareholders in Paddy Power would receive a special dividend of €80m. | Shareholders in Paddy Power would receive a special dividend of €80m. |
| There has been a flurry of merger activity in the gambling sector in recent months. | There has been a flurry of merger activity in the gambling sector in recent months. |
| In July, online gambling firm 888 Holdings won a takeover battle for rival Bwin.party in a cash-and-stock deal valued at about £898m. | In July, online gambling firm 888 Holdings won a takeover battle for rival Bwin.party in a cash-and-stock deal valued at about £898m. |
| The two companies had been in discussions since the middle of May. | The two companies had been in discussions since the middle of May. |
| Ladbrokes and Gala Coral also recently sealed a £2.3bn merger. | Ladbrokes and Gala Coral also recently sealed a £2.3bn merger. |