It has agreed to pay US$4.17bn to the ‘Fastball’ vehicle for the 37.2% stake in FanDuel, taking Flutter’s stake to 95% from 57.8%.
Flutter is paying Fastball owners US$2.08bn of cash and 11.7mln Flutter shares.
The deal accelerates a previously agreed phased transaction which would’ve seen Flutter buy the stake in two tranches, in July 2021 and July 2023, priced at prevailing market valuations.
Flutter highlighted that it has taken the opportunity to secure the stake at a discount to the intrinsic fair value, as well as a discount to its closest peer.
According to the betting company, the deal removes uncertainty over the buyout obligations, simplifies stakeholder arrangements, and increases Flutter’s flexibility to optimise US structure over time.
“Flutter’s initial acquisition of a controlling stake in FanDuel in 2018 has been transformational for the shape of the group,” said Peter Jackson, Flutter chief executive.
“Our number one position in the crucial US market is built on many of the assets we acquired through that transaction, supported by the broader group’s capabilities.
“Our intention has always been to increase our stake in the business and I’m delighted to be able to do so earlier than originally planned and at a discount to its closest peer.”
To support the deal, Flutter is raising GBP1.1bn through a share placing organised by Goldman Sachs and J&E Davy.
Fox Corporation, an existing shareholder, is participating in the placing. Lachlan Murdoch, Fox chairman, in a statement said: “Maintaining our ownership stake in Flutter signifies our long-term commitment to Flutter, and ongoing confidence in management’s ability to execute against the fast growing US opportunity.”