Flutter Entertainment has acquired the 5% of FanDuel that Boyd Gaming owned in a deal worth almost $1.8bn. [Image: Shutterstock.com]
Big money
Flutter Entertainment is now the sole owner of FanDuel after staving off rivals in recent years. It announced on Thursday that it is buying Boyd Gaming’s 5% stake in a deal worth $1.755bn, which values the US-focused operator at around $31bn.
will save Flutter about $65m annually
Flutter will use debt financing to pay for the transaction that is expected to close in Q3. Boyd Gaming has extended its market access partnership with the gambling group at lower rates until 2038, which will save Flutter about $65m annually.
Great deal for Boyd Gaming
Boyd Gaming originally acquired a 5% stake in FanDuel in 2018 as the operator tried to get a foothold in the US following the Supreme Court’s ending of the federal ban on sports betting.
The companies have worked closely together ever since, having a fixed-fee agreement for market access in Pennsylvania, Louisiana, Kansas, Indiana, and Iowa. FanDuel is also operating Boyd’s non-Nevada retail sportsbooks, which it will continue to do until the middle of next year.
Boyd plans to use the proceeds from the sale to pay down existing debt, which was $3.5bn after Q1.
Talking about the agreement on Thursday, Boyd Gaming President and CEO Keith Smith said that it “unlocks tremendous unrealized value” and will help it to pursue new opportunities, invest in existing properties, give back to shareholders, and maintain a healthy financial footing.
Not out of the woods yet
Flutter has maintained a strong relationship with Boyd Gaming over the years. The pair even reportedly considered a joint takeover of Penn Entertainment last year to carve out the land-based and digital assets of the embattled operator.
Murdoch-owned company has an option to buy 18.6% of FanDuel
Flutter might not hold 100% of FanDuel for very long if media firm Fox Corporation has anything to say about it. The Murdoch-owned company has an option to buy 18.6% of FanDuel off the back of Flutter’s $12bn acquisition of The Stars Group in 2020.
Fox had sold Sky Bet in 2018 to The Stars Group. It has until December 2030 to exercise its option, but there is a point of contention over how much the stake is worth.
Flutter contends that the price will be based on the fair market value of the operator on December 3, 2020, which was $20bn, with a 5% annual escalator then added on top.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
