Betfair to float

[TightEnd]

Papers today...


The projected offering, which is expected to value the group at around £1.5bn, is being seen as a further pointer to the strength of the market's recovery from the financial turmoil over the past 18 months.

A growing queue of flotation candidates has been waiting in the wings for an opportunity to come to the market but have been told they could struggle to find support and need a "heavyweight" stock to lead the way.
 
The steady improvement in the market has encouraged Betfair and others to look more closely at flotation. Investment bankers, starved of business, are running the rule over a number of companies regarded as ripe for flotation but with some leading commentators questioning the depth of confidence behind the recovery there is little enthusiasm for starting a rush to market.

Businesses in the flotation queue are said to include Saga, the travel and insurance services group, Acromas, the AA company and Pets at Home.

Betfair is planning extensive talks with advisers before making firm decisions on the timing of any move to raise fresh capital for a business, which has so far shrugged off recession and has changed the face of gaming in Britain.

The two founders, Bertie Black and Ed Wray, with 25pc of the equity, have no wish for a re-run of the events surrounding an earlier decision to pull a planned flotation several years ago. Both are anxious to have the resources behind them to prepare for acquisitions in the expectation that the Obama administration will lift the ban on online gambling in the US next year.

[TightEnd]

and more


Bertie Black and Ed Wray, Betfair's founders, have agreed for meetings to be held with banking advisers over the coming weeks to discuss a potential flotation in what would be the UK's first major listing since the financial crisis hit.

Betfair is keen to raise new capital in a bid to lead the consolidation of the global gaming industry and a flotation would give it the necessary means.
 
A listing would also land Mr Black and Mr Wray with a potential payout worth hundreds of millions of pounds, cementing their position as some of Britain's most successful entrepreneurs.

As well as the two founders, who own a combined 25pc stake, Betfair's shareholders include SoftBank, the Japanese bank, which owns a further 23pc and is thought keen to realise a return on its investment.

Softbank bought its stake in a £355m deal in April 2006, valuing the betting company at close to £1.5bn.

While Betfair has seen strong growth since then, equity market valuations have fallen sharply since the financial
crisis hit and Softbank's stake would likely be valued at a similar level to three years ago.

Mr Wray and Mr Black are thought each to be worth about £190m but could scoop a further £350m or more between them were they to offload their stakes in the company.

Private equity investors and management own the remaining 25pc of the company.

Betfair suggested it was not pushing towards a flotation when announcing results earlier this month but the founders are understood to have reconsidered their position in the wake of the continued strength in global equity markets.

While a flotation appears to be the most likely option, Betfair could choose to raise capital by other means, including tapping existing shareholders for further funds. A downturn in the equity markets could also persuade the founders to put any flotation plans on hold.

Betfair is keen to raise capital so that it can lead the consolidation of the gaming sector.

Industry experts believe a ban on online gaming in the US could be lifted as early as next year, a move that would be expected to lead to a pick-up in mergers and takeovers in the sector. 888 and Partygaming, the online gaming companies, are thought likely to be involved in any consolidation moves.

Goldman Sachs, Morgan Stanley and Rothschild have acted for Betfair in the past and might expect to be involved in any flotation or capital raising. Any discussions are thought likely to lead to a beauty parade of potential advisers in the coming weeks.

Betfair, which revolutionised UK betting with its peer-to-peer wagers, revealed record full-year results earlier this month.

Revenues rose 27pc to £303m in the year to April 30, with active users - those who placed a bet over the period - up 25pc to 652,000. Earnings before interest, tax, depreciation and amortisation rose 29pc to £72m, despite ongoing investment.

David Yu, Betfair's chief executive, said some two billion bets were placed on the exchange last year, an average of 6.4m trades a day, more than on all European stock exchanges.

Betfair is one of a host of private companies, many backed by private equity firms, expected to float in the last quarter of this year and the first three months of 2010.

Acromas, the group behind AA, the roadside emergency service, and Saga, the travel and insurance specialist, Pets at Home, the retailer, Merlin Entertainments, the London Eye operator, and United Biscuits and Birds Eye, the food companies, are just some of those thought to be on the shortlist of possible candidates.

Betfair declined to comment.

[AlunB]

The least surprising news since Ricky Martin came out.

http://news.sky.com/skynews/Home/Business/Online-Gambling-Site-Betfair-Confirms-Plans-To-Float-On-Stock-Exchange/Article/201009315737404?lpos=Business_First_UK_News_Article_Teaser_Region_2&lid=ARTICLE_15737404_Online_Gambling_Site_Betfair_Confirms_Plans_To_Float_On_Stock_Exchange

[tikay]

I think Betfair are a very fine company indeed, & I hope the float gets away at a nice premium.

I'll not be investing long-term, though, it does not add up to me.

If they want money to expand, by buying up businesses in the forthcoming free for all which will follow the inevitable legalisation in the USA, it's never been cheaper to borrow than it is at present. So I think the founding Shareholders are cashing in on their success, which they thoroughly deserve, I might add.

I'll swerve this one, I think.  My only caveat is that in the current climate, they'll need to pitch the price pretty low, & there may be an opportunity to get in & out for a nice quick turn. In that respect, it's extremely tempting.

Decisions decisions.