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Flutter, Stars merger on track despite COVID-19 pandemic

Flutter Entertainment, the parent company of Paddy Power Betfair has said its proposed mega-merger with The Star Group (TSG) will remain on track. Despite the pandemic COVID-19 outbreak severely affecting countries around the world, with death rate and positive cases going higher each day, the two operators announced the further details about the deal.

The merger was announced last year in October, will now see Flutter acquire all shares of TSG and join together to create a combined business with annual revenue of £3.8 billion. Although, an agreement is yet to be authorized by the Competition and Markets Authority, the company will set out to build a more competitive product range of the best in sports betting, poker, casino, fantasy sports, and free play offerings.

Flutter updated that amidst the Coronavirus disruptions, the financial profile of the combined group will be impacted. However, the operator group praised its M&A focus, stating that stronger cash generation, scale and combined synergies will help the business outride COVID-19 factors.

Flutter generated a whopping 78 percent of its revenues from sports betting last year. Earlier this month, it warned investors to expect a hit to profit this year of between £90 million ($109 million) and £110 million ($134 million). Despite becoming a major body in sports space through its acquisition of SkyBet, TSG still makes 62% of its money from poker and casino games.

The final dividend of Flutter for the financial year ending 31 December 2019 was priced at 122 pence per share which will be paid in shares instead of cash. In addition to this, the company also said its shareholders would be entitled to a pro-rated dividend for the period from 1 January 2020 until the transaction is closed. It also suspended its dividend for the year ending 31 December 2020.

Flutter chief executive Peter Jackson said: “We are pleased to publish our prospectus and circular in relation to our combination with The Stars Group. In these challenging times I am more convinced than ever of the strategic fit of these two complementary businesses. The combined business will enjoy improved geographic and product diversification and allow us to advance our strategic goals. I am delighted that Rafi has agreed to join the Flutter Board and to be available to me as a consultant given his extensive knowledge of Stars’ international business.”

“We continue to work with various competition and anti-trust authorities globally to secure the few remaining approvals required. We do so while never losing sight of our current primary objective to ensure the safety of our staff and customers during these unprecedented times.”

Divyesh Gadhia, who is currently executive chairman of TSG, will become deputy chair of the group, following completion of the merger. Richard Flint, Alfred Hurley, Jr., David Lazzarato and Mary Turner will also become directors. For more updates on the gaming industry and poker tournaments across the country, stay tuned to GutshotMagazine.com.

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