Betfair, the leading exchange, on Monday dismissed a £910 million takeover bid, from a group led by CVC Capital Partners.
However, the fact that an offer was made, effectively means that the company is on the market if the right price is put forward. Monday’s offer of 880p was said to “fundamentally undervalues” the business. However, it is much higher than the current share price,and has to be tempting for company owners.
Peel Hunt said: “While the offer is not a knockout bid, it is an interesting starting point. The risk is that CVC see themselves as a potential stalking horse for an industry buyer — an industry player could then bide its time.”
CVC, the private-equity house that owns Formlua One, has the backing of significant Betfair shareholders Antony Ball and Richard Koch.
Betfair chairman Gerald Corbett said: “We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise.”
Betfair reported losses of £64 million In the six months to October. It has suffered as it was unable to expand into some new markets where betting is banned by law.