Poll: Should Betfair go private?

With a big-money takeover bid from CVC Partners looming, Betfair could find itself a private company again just three years after floating on the London Stock Exchange in 2010.

CVC, which has investments in Formula One and Samsonite, has until 5pm on 13 May to announce a firm intention to launch a bid. It confirmed today that it has held preliminary discussions with investors including Antony Ball and Richard Koch, a 6.5% shareholder in Betfair.

Betfair’s share price rose 14% on the news, with the operator advising investors to take no action. It said in a statement: “There can be no certainty that an offer will be made or as to the terms on which any offer might be made.”

While remaining a public company would have its advantages, the reduced regulatory and reporting requirements of being private would free up and the time and money to allow the operator to focus on its long-term goals of becoming a one-stop shop for gambling, rather than short-term earnings management.

Indeed CEO Breon Corcoran has already shifted the operator’s focus away from the complex regulatory minefields of markets such as Greece and Cyprus, while also trimming staff numbers since joining last year.

Moreover, both management and shareholders would likely reap significant financial rewards following any buyout.

However Betfair’s exec team will have to weigh up these pros with losing the benefits being listed brings, including the ability to raise additional funds through the issuance of more stock, and the brand equity having a listing on a stock exchange brings.

The gaming operator could be faced with a very tricky decision come 13 May should CVC comes in with a bid as expected. But do you think its shareholder and management should sell and take the company private? Or do you believe it is best placed as a transparent, public company?

Have your say by voting in the poll on the right-hand side of the page.