Yahoo Finance Coronavirus: Paddy Power owner Flutter raises £812m for post-pandemic world
Paddy Power owner Flutter (FLTR.L) on Friday raised £812m ($1bn) from investors to help fund the long-term changes required in a post-coronavirus world.
The firm, which also owns Betfair and Skybet, said that it had placed more than 8 million new shares with institutional investors, representing around 5.5% of the company’s total share capital prior to the move.
The money was raised at a 4.7% discount on the closing price of Flutter’s shares on Thursday, when the company said that the move would “better position” the group to capitalise on long-term changes resulting from the coronavirus pandemic.
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Noting that the it had consulted with major shareholders prior to the placing, Flutter said it was pleased with the “strong support” it had received from new and existing shareholders.
Fox (FOXA), which purchased an almost 5% stake in Flutter for $236m (£192m) around a year ago, said on Thursday (28 May) that it would increase its stake in the placing, since it was “bullish about the opportunities in the digital sports wagering market.”
Flutter, whose merger with Canada’s Stars Group only closed on 5 May, warned on Thursday that the pace of regulation in the US could accelerate as an increasing number of states seek new ways to raise additional sources of tax income.
“Flutter is determined to give its US business the best possible platform for future success and to replicate the leadership position it has achieved in the states that have regulated to date,” it said.
The firm also said that the placing would allow it to invest further in its online gambling businesses, noting that the pandemic had resulted in an “accelerated migration” of customers from the high street to online gambling platforms.
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The cash raised will also allow it to finance cost-savings and will also bolster its balance sheet “in a more uncertain environment,” it said, pointing to the debt reduction resulting from the placing.
In its trading update for the second quarter, Flutter said that revenue thus far in its second quarter had increased by 10% compared to last year, despite what it called “widespread ongoing disruption” to global sports.
The boost to revenue came as a result of its TVG and Australian businesses, both of which benefitted from the continuation of horse racing behind closed doors.
Shares in Flutter fell by more than 0.5% on Friday.
