Operators Paddy Power and Betfair have reached an agreement in principle on the key terms of a possible merger and the combined group is to be titled Paddy Power Betfair plc.
Paddy Power shareholders would own 52% of the issued and to be issued share capital of the combined group, while Betfair shareholders would own 48%.
A deadline of 5pm on 23 September has been set for Paddy Power to announce whether or not it intends to make an offer for Betfair, though the deadline could be extended by the UK Takeover Panel.
Paddy Power shareholders would receive a special dividend of €80m and its chairman Gary McGann would become chairman of the board of the combined group, while Betfair CEO Breon Corcoran, former COO of Paddy Power, would be the combined group’s CEO.
Andy McCue, Paddy Power CEO, would be COO and an executive director of the combined group.
Discussions of the terms of the merger are ongoing.
A spokesperson for Paddy Power told Gambling Insider that elements of the deal are 90% completed.
No details could be given on the value of the merger or when discussions over the merger began and the spokesperson could not say if the future of Betfair’s online partnership with Golden Nugget Atlantic City had been involved in the discussions.
Betfair could not be reached for immediate comment and its share price was £30.65 at the time of writing on Wednesday, up 44% from the previous day’s close.
The announcement of the merger between Paddy Power and Betfair was released by both companies on the same day that both released their latest financial reports.
Paddy Power reported a 33% year-on-year operating profit increase to €80.1m for the six months ended 30 June, while net revenue increased 33% to €527.8m and online operating profit ascended 63% to €69.9m.
Betfair released its figures for the three months ended 31 July, which showed that revenue went up 15% year-on-year to £135.4m and EBITDA increased 19% to £41m.