Betfair and Paddy Power Agree to Merge Creating a £6.5bn Gambling Giant

Wan Chai, Hong Kong, August 28, 2015 (Newswire.com) - Bliston Asset Management’s senior analyst said that “last year’s combined financial figure of £1.1 billion will make them one of the largest online betting and gaming companies in the world based on revenue and we anticipate big things from the merger, with both stocks already up almost 17% after the announcement”.  Bliston believe the combined groups size will assist it to better compete in new and existing markets and allowing it to combine some of its shared resources into one entity making it leaner and more profitable.

Paddy Power had just released its half year figures which showed operating profits had risen by a third to €80m, this was a good result considering the additional taxes that were being levied on betting companies (Point of Consumption and Machine Games Duty). Paddy Power’s online business did exceptionally well showing a 45% increase in operating profits on a constant currency basis.

Once the deal is finalized 52% of the shares would be owned by Paddy Power’s shareholders leaving the remaining 48% of the combined group’s shares to Betfair’s shareholders. Paddy Power’s shareholders would also be receiving a special dividend believed to be in the region of €80 million.

Under the merger Paddy Power’s Chairman Gary McGann would be installed as chairman of the combined group, while Betfair’s Chief Executive Breon Corcoran would take up the position of CEO.

With recent mergers such as Coral and Ladbrokes also in the spotlight, Bliston Asset Management’s analysts see the sector as one that is undergoing a major transition. They believe the merger will make the group a serious player that will vying for the top spot in terms of revenue and operating profit and see it as a buy now stock.