Rafi Ashkenazi: Third time lucky for Flutter after Stars refused to engage with initial bids

Rafi Ashkenazi has revealed The Stars Group (TSG) rebuffed two initial takeover attempts from Flutter Entertainment before eventually opening discussions after a third bid was lodged. Speaking exclusively to EGR Intel, the former TSG CEO said the business was keen to pursue its own M&A agenda, but “couldn’t really ignore” an attractive offer from Flutter at the third try. “There were a couple of attempts made by Flutter before we actually engaged in discussions with them,” Ashkenazi said. “Twice we said to them that we don’t want to engage and only on the third time did we actually agree to engage in discussions, which were eventually successful. “Even on the third time, it was by no means guaranteed that a deal would go through. There were quite a few ups and downs and it wasn’t a done deal until the very, very end,” he added. Flutter successfully completed its takeover of TSG in May. Ashkenazi became a strategic adviser to the firm before exiting the combined business in August.

Discussing the initial reluctance to engage, Ashkenazi highlighted TSG’s strong operating model and strategy of driving inorganic growth as factors behind the stance. “We had a massive platform, we had a very diversified business, we had great technology in-house, we had great people, a great management team that was already established, as well as a future in the US that was very attractive. We were in a very good place,” Ashkenazi explained. “We did have some challenges when it came to the international business, specifically around poker, on the back of multiple headwinds that we had to deal with, but we felt that we knew how to deal with them. “At the same time our other businesses were really compensating for some of the challenges that we had in the international market and we could continue driving our strategy,” he added. In the first half of 2020, prior to merging with Flutter, the TSG business performed strongly, with PokerStars revenue rising 40%. The business also saw constant currency gains in gross profit (43%) and adjusted EBITDA (67%). Since stepping away from TSG, Ashkenazi has served as a strategic adviser for B2B marketing firm Blue Ribbon.