Flutter Entertainment to Purchase The Stars Group and Create Online Betting Leader

Aiming to create a global leader in sports betting and gaming, Flutter Entertainment plc (“Flutter”) and The Stars Group Inc. (“TSG”) announced a strategic collaboration. Two corporations concluded a recommended all-share combination which will be implemented through the acquisition of TSG by Flutter pursuant.

Each of the brands will bring The Combined Group a proven track record, consisting of a diverse portfolio of influential brands and top-notch quality products. Both companies already have an extensive market reach and the beneficial agreement will help them enhance the presence both the world and industry-wide. The expected annual revenue of the Combined Group’s would have been £3.8bn in 2018, bringing it the title of the most immense online betting and gaming supplier on a global level.

Agreement Highlights and Board Composition

As far as the terms of the Combination state, TSG Shareholders will be entitled to receive 0.2253 New Flutter Shares in exchange for each TSG Share. Flutter Shareholders would own approximately 54.64 percent and TSG Shareholders would own approximately 45.36 percent of the share capital of the Combined Group.

Following the completion of the agreement…

…the two brands will adjust the strategic and financial goals, focusing on stabile development and enhancement and delivering high-quality sports betting, poker, casino, fantasy sports, and demo games.

Fox Sports will gain the right to acquire 18.5% of Flutter’s US fantasy sports business FanDuel at market value from 2021.

The Group’s Board will gather 14 members, drawing experience from both corporations. Peter Jackson, currently CEO of Flutter, will assume the role of CEO of the Combined Group, while Rafi Ashkenazi, TSG’s CEO, will take the position of COO of the Combined Group. There will also be nine non-executive directors comprising five nominated by Flutter, three nominated by TSG and the appointment of Richard Flint, former CEO of SBG.

The approval of Flutter and TSG Shareholders is expected to be sought in the Q2 of 2020. Completion should occur during the Q2 or Q3 of 2020.

Providing World-Class Capabilities

Being a global sports wagering, and gaming supplier, Flutter currently operates in the online and retail sector. Online is in charge of three brands, the Paddy Power, Betfair and Adjarabet, while retail operates more than 620 Paddy Power betting shops across the UK and Ireland.

The entity also runs businesses in the US operating the FanDuel sportsbook and daily fantasy sports brands as FanDuel Group. Moreover, the company is also present in Australia, running the Sportsbet online sports betting brand, a leading Australian corporate bookmaker.

Believing that the combination of two gargantuan corporations will deliver substantial shareholder value, along with an outstanding portfolio of top-quality products, Peter Jackson, CEO of Flutter commented on the merger as follows:

“The combination represents a great opportunity to deliver a step-change in our presence in international markets and ensure we are ideally positioned to take advantage of the exciting opportunity in the US through a media relationship with FOX Sports as well as our development of US sports betting through Flutter’s FanDuel and TSG’s FOX Bet brands. We are committed to these two high-quality brands to drive the growth of the Combined Group in the US.”

Jackson also added that:

“The combination will turbocharge our existing four-pillar strategy and provide world-class capabilities across sports betting, gaming, daily fantasy sports, and poker, as well as greater geographical and product diversification.”

The four-pillar strategy aims to:

• Maximize profitable growth in core markets
• Grow in the rest of the world
• Attain podium positions in additional regulated markets
• Pursue US opportunities rigorously

Enhancing Core Strengths

Having millions of registered customers globally and collectively are leaders in online and mobile betting, poker, casino, and other gaming-related offerings, The Stars Group has established itself as one of the most renowned providers of technology-based product offerings in the global gaming industries.

The lengthy list of businesses and brands comprises numerous names such as…

… PokerStars, PokerStars Casino, BetStars, Full Tilt, FOX Bet, BetEasy, Sky Bet, and several more. In addition to this, there are live poker tour and events brands.

TSG holds a total number of licenses or approvals in 21 jurisdictions throughout the world, including in Europe, Australia, and the Americas.

Commenting on the agreement, Rafi Ashkenazi, CEO of TSG said:

“This exciting combination will allow us to enhance and accelerate our existing strategy. In recent years, we have transformed TSG from a single product operator in poker to a diverse global leader with multiple product offerings across poker, gaming, and sports betting. The combination with Flutter will further enhance our company’s core strengths and position us strongly for the future in this rapidly evolving industry. I’m delighted to be joining the Board of the Combined Group and to serve as its COO.”

Source:

“Proposed combination with The Stars Group”, flutter.com, October 2, 2019.