Former FanDuel founders sue Flutter $120m for undervaluing their shares
Former CEO Nigel Eccles says the Flutter takeover bid did not consider the potential for US growth
Three FanDuel founders are initiating legal action against the company for undervaluing their shares in its $465m sale to Flutter (formerly Paddy Power Betfair).
The $120m lawsuit is calling for a revaluation of FanDuel in light of US sports betting opportunities and its major expansion following the repeal of PASPA last May.
It has been filed by former FanDuel CEO Nigel Eccles and his wife Lesley Eccles, as well as former CPO and advisor Tom Griffiths and Rob Jones.
As part of the Flutter takeover, FanDuel investors were offered shares in the new business while non-preferred shareholders, like the Eccles, were not awarded any returns.
This is the second time Eccles has put forward the case against the operator, but the initial proceedings fell through.
The petition put forward by Eccles said: “The decision of the board (whose interests are aligned with preference shareholders), not to seek and act upon a new market valuation in the face of a material event, which is likely to have significantly increased the market valuation of FanDuel, is a breach of its fiduciary duties.”
FanDuel CEO Matt King said: “While it is possible the case reaches a merits determination, the group does not consider it probable and therefore no accrual has been recorded as of the balance sheet date.”