Betfair rejects 'undervalued' PS910m takeover.
BETFAIR yesterday backed its "unique" business and future prospects when rejecting a takeover approach from a consortium led by private equity group CVC Partners worth PS910 million.
The world's biggest betting exchange, which has been under pressure to improve both its flagging share price and financial performance, turned down the bid on valuation grounds.
CVC, whose investments include F1 motor racing, revealed early last week it had held talks with other investors including Richard Koch, the former management consultant, entrepreneur and author who owns a 6.5 per cent stake in Betfair and fellow businessman Anthony Ball and partners about a possible bid for Betfair.
CVC's proposal, submitted to the Betfair board on Friday, valued the company's shares at 880p, which compared to PS13 when the business was first floated on the stock exchange in 2010. The share price fell to a 52-week low of 650p in January but, while it subsequently recovered, the recent surge in value has centred around the takeover speculation.
Under the terms of the proposal, CVC would have created a new company and issued new shares and loans to existing shareholders as part of the deal.
Betfair said the offer "fundamentally undervalues the company and its prospects, and is highly conditional".
The company went on to say it is going through one of the "most exciting phases of its development", with chief executive Breon Corcoran, who joined Betfair from Paddy Power last year, concentrating on regulated markets, having pulled out of Greece and Germany in the past 12 months, and also carrying out a PS20 million cost-cutting exercise.
Betfair chairman Gerald Corbett said in a 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 May 7 on the good progress in the implementation of its strategy, including cost efficiencies and recent trading performance."
Shares in Betfair yesterday closed at 838.5p, a rise of 33.5p.