Flutter to "vigorously defend" against Fox's FanDuel lawsuit

By Gambling Insider

Fox Corp has filed an arbitration claim over the value of its stake in FanDuel, which is owned by Flutter Entertainment.

Flutter now owns around 95% of FanDuel after it bought a 37.2% stake from Fastball Holdings last year. It then enlisted the support of Fox to close the deal and, to help, Fox bought new Flutter shares.

Flutter then gave Fox an option to acquire 18.6% of shares and, through the deal last year, the shares had an enterprise value of $11.2bn.

Fox exercised its rights within the deal and offered $11.2bn for 18.6%; however Flutter now says the price has changed from last year and that it should reflect a “fair market value,” as it says last year's deal was set a discount price.

Flutter is trying to get FanDuel an initial public offering but if it can’t do this by July, banks will have to determine the price. It is believed this figure could eclipse rival DraftKings’ market capitalisation of $25bn, since FanDuel has a higher market share in key markets.

Fox disputes that this value was not included in the original agreement with Flutter, saying it is fabricating the market value. The company wants to pay a price that would mirror Flutter's agreement with Fastball last year.

This disagreement has led to a confidential lawsuit, as a spokesperson for Fox confirmed the company filed the case to New York’s Judicial Arbitration and Mediation services (JAMS) by consent of the parties.

In a statement to CNBC, a Fox spokesperson said: “Fox Corporation has filed suit against Flutter to enforce its rights to acquire an 18.6% ownership interest in FanDuel Group for the same price that Flutter paid for that interest in December 2020.”

If Fox can prove the original agreement showcased anything other than the value Flutter asked for, the company will endure a more difficult time taking FanDuel public later this year.

In its own statement, Flutter has said: “Flutter will not allow Fox’s filing, which is without merit, to distract from its business and will vigorously defend its position in the arbitration.”

As reported in the Financial Times, Fox may even try to promote its own Fox Bet to rival FanDuel if things don’t go according to plan.


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