Betfair ends CVC discussions
Operator rejects "final" offer of 950p a share
Betfair has ended takeover talks with private equity group CVC Partners at the eleventh hour after rejecting an improved offer for the business.
The operator revealed late last night it had turned down a “revised” bid of 920p a share following the initial 880p bid rejected last month and a subsequent “full and final” bid of 950p a share.
Despite “detailed discussions”, Betfair chairman Gerald Corbett (pictured) said “none of the proposals represented adequate value or acceptable execution risk”. CVC said in a statement this morning that having “been unable to agree financial terms” it “has no intention of making a [further] offer for Betfair”.
Following the commencement of early stage talks between the parties last month, CVC was given until yesterday to return with a firm offer. However this deadline was later extended by 24 hours before talks were terminated last night.
According to a statement from Betfair the revised 920p proposal was brought “on the evening of 10 May”, however this was rejected by the operator’s board. The rejected approach was followed on Sunday by a “full and final offer” of 950p a share.
“The Board reviewed the Further Revised Proposal with its advisers and rejected it on the basis that it undervalues the Company and its attractive prospects,” Betfair explained in a statement.
Discussions continued after that point, however despite further talks the operator said “it became clear that it would not be possible to agree the terms of any proposal in conjunction with a business plan that was deliverable”.
Last week saw Betfair project FY2013 revenues at £387m, and Corbett said the board believes the company “is making excellent progress in the implementation of its strategy”.
He added that “momentum [is] building from early success” as Breon Corcoran continues to implement changes after coming in as chief executive last August. These include the layoff of 500 staff and the withdrawal from certain markets, however the CEO spoke last month of his encouragement at “positive regulatory momentum in Italy, Spain and the USA”.