Paddy Power Betfair (PDYPY) shares were one of the biggest gainers in European trading Wednesday amid reports the Dublin-based bookmaker is preparing to combine its business with fantasy sports website FanDuel.
The move marks the latest in a series of reported deals, including the $2.2 billion purchase of the Carolina Panthers by hedge fund billionaire David Tepper, that follow the U.S. Supreme Court's decision earlier this week to lift a ban on sports betting in the state of New Jersey. Analysts have said the ruling that could open the $150 billion a year sports betting market around the nation an enrich the value of professional leagues and franchises along the way.
"Paddy Power Betfair confirms it is in discussions, regarding a potential combination of the Group's US business and FanDuel to create a combined business to target the prospective US sports betting market," the company said in a statement Wednesday. "Discussions are ongoing and there is no certainty as to whether agreement will be reached, or as to the terms or timing of any transaction."
Paddy Power shares were marked 6% higher and changing hands at 8,225 pence each by mid-day in London, the highest since March 6.
Speculation that Tepper, who already owns a 5% stake in the Pittsburgh Steelers, is ready to complete a deal to buy the Panthers from 81-year old owner Jerry Richardson was also accelerated by news that his Appaloosa LP hedge fund has sold major stakes in Action Alerts PLUS holding Apple Inc. (AAPL) and Bank of America (BAC) while increasing holdings in Caesars Entertainment Corp. (CZR) and MGM Resorts International (MGM) , two stocks that are expected to benefit from the Supreme Court's decision.
"I look forward to turning the stewardship of the Panthers over to David Tepper," Richardson said in a statement published Wednesday. "I have enjoyed getting to know him in this process and am confident that he will provide the organization with great leadership in both its football and community initiatives. I wish David and his family the very best as they enter this exciting new phase of their lives."
NFL.com reported the sale of the Panthers netted $2.275 billion, just ahead of the $2.2 billion paid for the Houston Rockets of the National Basketball Association by Texas billionaire Tilman Fertitta last September.
"I think everyone who owns a top four professional sports team just saw the value of their team double," Mark Cuban, who owns the Dallas Mavericks basketball franchise, told CNBC Monday.
Churchill Downs Inc. (CHDN) said Wednesday unveiled an agreement with Golden Nugget to enter the New Jersey gaming and sports betting markets, with a target of taking bets from the first quarter of next year.
Paddy Power's combination with FanDuel would likely be priced below the fantasy sports group's previous value of $1 billion, which it reached during its ill-fated attempt to combine with rival DraftKings last year, given the expected competition both groups are expected to face as the sports betting market expands nationwide.
At least seven states -- Connecticut, Delaware, Pennsylvania, Iowa, New York, Mississippi and West Virginia -- have sports betting statues in place for legislative approval that could come before the start of the NFL football season in September. A further 13 more, including California and Illinois, are considering similar rule changes to grab some of the expected gaming revenue.