Betfair sit tight despite CVC bid
Betfair has recently received a £920 million private equity takeover bid, from a consortium headed by CVC capital partners. CVC's bid was rejected outright by the board including one of the co-founder's Edward Wray, as it was felt that the offer did not represent the full value of the company.
Edward Wray believes that the new chief executive Breon Corcoran is doing a very good job and should therefore continue in the direction, that he is currently steering the company. Although reports at the moment do not suggest that there would be any changes to the management structure, should the proposal be accepted.
The CVC consortium's offer involves a very complex plan, which would require the creation of a brand-new company, with new shares and loans issued to shareholders as part of the takeover. Not all of the shareholders rejected the offer, Richard Koch who holds 6.5% shares in the company, believes the deal would benefit Betfair.
As the company is doing relatively well the CVC offer of 880p per share is considered in the industry to be too low and should be around £10 per share, to be attractive to the shareholders. The offer was put on the table Friday last week, on the same day shares in the company rose by 15% to 805p. With things going so well, it is understandable that shareholders are sitting tight.
We will of course bring you more on this story as it develops.