This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

CVC Capital May Bid for U.K.'s Betfair

NEW YORK ( TheDeal) -- Buyout firm CVC Capital Partners Group is calculating the odds of success before taking a shot at U.K. online betting company Betfair plc, but has already hired an investment bank to advise it on a possible bid for the London-listed company.

The odds seemed good enough for the market to push up Betfair's shares to 772.5 pence by the end of the morning on Monday, up by 73 pence, or over 10%, on Friday's close. Following confirmation of CVC's interest, the shares had earlier Monday peaked at 789 pence, equating to a market capitalization of £740 million ($1.13 billion).

CVC confirmed what it called "preliminary discussions" with one of the founding investors, Richard Koch, who still owns 6.54% of the company, as well as Antony Ball and other unnamed "partners."

It made no mention, however, of direct contact with the company's board of directors, and a prickly response from Betfair made clear that it had not been consulted.

Betfair said it was concentrating on delivering a new strategy announced in December and "strongly advised" shareholders to take no action. CVC, Koch and Ball, who are advised by Robert Leitao of Rothschild, now have until May 13, under U.K. Takeover Panel rules, to make a formal offer for the company or walk away.

Betfair made its debut on the London Stock Exchange in October 2010, with an initial public offering priced at 1,555 pence. The stock performed poorly, largely due to regulatory uncertainty in a number of its international markets. Last year its new CEO Breon Corcoran began withdrawing from difficult or unregulated markets. He has already pulled the company out of Greece and Germany and may exit Cyprus, Russia and elsewhere. Betfair is now focused on regulated markets including the U.K., where income is more secure.

In the six months to October, London-based Betfair announced group revenue of £200.6 million, up 5% on the first half of 2011, with underlying Ebitda of £42.3 million. Although international revenue has fallen following the repositioning, Betfair's earnings have improved in its core market.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $128.98 -0.29%
FB $80.17 0.72%
GOOG $573.51 -0.02%
TSLA $198.77 -0.40%
YHOO $43.48 2.00%


DOW 18,097.38 -105.99 -0.58%
S&P 500 2,096.31 -11.47 -0.54%
NASDAQ 4,961.6430 -18.2580 -0.37%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs