eBusiness Weekly
Fox Corp said on Tuesday it had filed a suit against Flutter Entertainment related to exercising its option to buy a 18,6 percent stake in US sports betting firm FanDuel Group.
Fox wants to pay the same price for the stake in FanDuel as Flutter had paid in December, while the latter has argued that Fox must pay a “fair market value” to exercise the option in July, CNBC reported.
Paddy Power Betfair’s owner Flutter, which merged its U.S. business with FanDuel in 2018, had raised its FanDuel holding to 95 percent in December in a $4,18 billion deal.
Flutter had enlisted Fox’s help to get the deal through, giving it the option to buy 18,6 percent of FanDuel in July this year.
Flutter on Wednesday said it will “vigorously defend its position against Fox relating to its option to buy a 18,6 percent stake in the U.S. sports betting firm, FanDuel Group.
Fox wants to acquire the stake in FanDuel for the same price Flutter paid for the interest in December last year. Flutter argues the parties had agreed the exchange should take place at a fair market value.
Flutter, which merged its US business with FanDuel in 2018, raised its FanDuel holding to 95 percent in December in a $4,18 billion deal, enlisting Fox’s help to get the transaction through and giving it the option to buy 18,6 percent of FanDuel in July this year.
“Fox’s position that it has a right to acquire an 18,6 percent interest in FanDuel based on an $11,2 billion valuation is incorrect. It would represent a windfall to FOX compared to the fair market valuation as of July 2021, to which the parties had previously agreed,” Flutter said in a statement on Wednesday.
“Flutter will not allow FOX’s filing, which is without merit, to distract from its business and will vigorously defend its position in the arbitration.”
The United States is seen as the next big growth market for sports betting, spawning a series of transatlantic partnerships tapping into European expertise such as Britain’s William Hill being bought by Caesars Entertainment (CZR.O) in a 2,9 billion pound ($3,9 billion) deal announced last September.
London-listed shares in Flutter were down 1.6 percent at 155 pounds at 0830 GMT, having earlier traded as low as 151.25.
Separately, a bookrunner said a Flutter shareholder was selling about 2.3 mln shares at a 2,8 percent discount to Tuesday’s close, or 153,50 pounds per share. — Reuters
