BetFair Spurns Takeover Offer
Betfair has rejected a buyout offer from a private equity firm valued at £900 million ($1.3 billion USD) saying that it, “undervalued,” the company. The offer came from CVC Capital Partner, the outfit best known for bankrolling Formula One.
CVC is run by Richard Koch, one of Betfair’s earliest investors and the owner of nearly 6% of the company’s stock. (Koch is also a well-known entrepreneur and business author in the UK.)
Whatever past relationships Koch has with the company seemed far removed from the the tersely worded statement posted on Betfair’s website that said, in part:
(The offer) fundamentally undervalues the Company and its attractive prospects, and is highly conditional…We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise.
In that same release, company spokesmen touted Betfair’s future and said that a May 7 update would highlight:
The good progress we are making in the implementation of our strategy, including cost efficiencies, and our recent trading performance.
This confident attitude is a good sign for the company that’s seen its share of challenges since going public a couple years back. Betfair stock was up slightly after the announcement was made.
Do you think rejecting this offer was a good move by Betfair? Share your thoughts in the comments section below.