flutter and stars confident of mega merger green lightby Joker 02.10.2019 0 comments
Following this morning’s announcement that The Stars Group (TSG) is to be acquired by Flutter Entertainment, board members have emphasised their confidence that the mega-merger would gain the necessary regulatory approvals to go ahead.
Confirmed in a conference call with both investors and industry analysts, Flutter chief executive Peter Jackson emphasised that he believed there should be no concerns regarding whether the merger would pass competition checks in the UK.
The merger is to be subject to an examination by the UK’s competition authorities, which often investigate any merger whereby combined UK turnover exceeds £70m (€78.6m/$86.0m) or combined market share exceeds 25%.
“We’re very respectful of the competition authorities such as the CMA in the UK,” Jackson said. “We look forward to working with them in due course and we are confident that we will receive the relevant approvals in due course.”
Immediately following completion of the Combination, Flutter Shareholders would own approximately 54.64 per cent and TSG Shareholders would own approximately 45.36 per cent of the share capital of the Combined Group.
Reassuring stakeholders, Jackson also added that there should be no regulatory concerns in Australia where its Sportsbet.com.au and the Stars Group’s BetEasy currently compete with the Totalisator Agency Board (TAB).
He added: “We are very respectful; we know what we need to do in Australia and will work and engage with them in due course.
“We both run brands in Australia that are trying to take on the might of the TAB, they’re the behemoth in the market and we’re just small corporate bookmakers nipping at their heels.”
Jackson explained that when it comes to operating multiple brands in the same jurisdiction, the mega-merger will employ a similar strategy to Flutter’s strategy of operating brands such as Paddy Power and Betfair in the UK.
“We’ve had a lot of experience of operating a multi-brand strategy and the way we want to continue to do it in the US is to maintain the purity in terms of customer databases,” Jackson said.
“We have many customers who play daily fantasy sports on FanFuel and we plan to cross-sell those players into sports betting, gaming and horse racing as appropriate, but we don’t try to move players from Paddy Power to Betfair and we won’t try to move players between any of these new brands.”
The approval of Flutter and TSG shareholders is expected to be sought in the second quarter of 2020. Completion is expected to occur during the second or third quarter of 2020 dependent on multi-market regulatory approval.
The mega-merger, according to TSG CEO Rafi Ashkenazi, is primarily focused upon the growth of the two companies. He explained: “This is about driving growth into the business.
“Cost synergies are important but they’re not why we’re doing this deal.”
Upon completion, it is intended that the Combined Group’s Board will comprise of: