CVC given 24-hour Betfair extension
Private equity group yet to return with improved bid for operator
Betfair has requested CVC be given a 24-hour extension to its deadline to launch an improved bid for the London-listed operator.
If approved by the Takeover Panel, the extension would see the private equity group given until 5:00pm GMT tomorrow to return with an improved bid for the company, following last month’s rejection of an 880p a share offer.
Analysts have suggested a successful bid would have to be in the region of £10 a share, with Nick Batram of Peel Hunt suggesting the Formula 1 owner would need to up its offer “significantly”.
If a new bid is launched and accepted, it would see Betfair taken private less than three years after its October 2010 float.
The operator said last month’s offer undervalued Betfair and its “attractive prospects”, with chairman Gerald Corbett claiming the company “is currently going through one of the most exciting phases in its development”.
Last week saw Betfair issue a post-close trading update in which chief executive Breon Corcoran pledged to pursue “targeted acquisitions” with the aim to “add further domestic scale, achieve geographical expansion and close product gaps”.
The operator completed the acquisition of Rank Group brand Blue Square Bet last month, and Corcoran suggested Betfair would make use of the company’s £168m cash balance to pursue further deals with a view to enhancing product and marketing.
The operator has projected FY 2013 revenues of £387m, ahead of guidance estimates, and Corcoran made particular reference to “positive regulatory momentum in Italy, Spain and the USA”. Both Spain and Italy have made progress on the regulation of exchange betting, with Italian regulations poised to take force before the end of this month.