BUSINESS

Paddy Power Betfair $660M buyback program moves forward

TAGs: paddy power betfair

Bookmaker PaddyPower Betfair (PPB) has started returning £500 million (US$667.4 million) to shareholders via a stock buyback as it seeks to reduce the company’s share capital.

Paddy Power Betfair $660M buyback program moves forwardPPB plans to implement the share buyback program in tranches that will run over the next 12 to 18 months, the company said in a statement. The maximum number of ordinary shares to be repurchased under the share buyback program will reach 12,692,692.

For the first tranche, PPB intends to give back £200 million ($267 million) in the next three months, subject to market conditions. The Dublin-based wagering firm said ordinary shares may be repurchased on both the London Stock Exchange and the Irish Stock Exchange, trading as Euronext Dublin.

PPB has tapped international investment bank Goldman Sachs Group Inc. to repurchase the shares on its behalf.

“The purpose of the share buyback program is to reduce the Company’s share capital. Shares purchased by the Group will be cancelled,” PPB said in a statement. Tthe company announced the plan following its dismal first-quarter results.

PPB reported that its Q1 revenue fell 2 percent year-on-year to £408 million ($544.6 million) while underlying earnings (factoring out one-offs) dropped 8 percent to £102 million ($136.1 million) and underlying operating profit slipped 12 percent to £80 million ($106.8 million).

The buyback comes a week after PPB and U.S. fantasy sports giant FanDuel agreed to merge their U.S. operations in preparation for the bookmaker’s U.S. expansion after the Supreme Court lifted the federal ban on sports betting.

The ‘merger’ involves only PPB’s U.S.-facing Betfair operations, which includes the TVG online horseracing business and a Betfair-branded New Jersey online casino site.

PPB will hold a 61 percent of the enlarged U.S. company, with options to increase that stake to 80 percent after three years and 100 percent after five years. PPB will also appoint the U.S. entity’s CEO and a majority of its directors.

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