Betfair Board Rejects CVC Capital Partners’ Offer

Issuing a statement regarding the initial moves by private equity company CVC Capital Partners towards its acquisition, online betting company Betfair's board of directors has rejected the offer. Namely, the Board specified that on 15 April 2013, CVC Capital Partners Limited first announced that it was in preliminary discussions with Richard Koch, Antony Ball and partners regarding a possible offer to take over Betfair, and that on 19 April 2013, the Board of Betfair received a preliminary proposal from CVC and its partners in the offer proposing a 880 pence per Betfair share in cash or an unlisted securities alternative comprising shares and loan notes (subject to an unspecified overall limit) in a new entity to be incorporated. Further on in its statement, the board notes that this proposal was conditional on completion of due diligence, arrangement of appropriate financing and receipt of a recommendation from the Board of Betfair. However, "The Board of Betfair has reviewed the proposal with its advisers and rejected it on the basis that it fundamentally undervalues the Company and its attractive prospects, and is highly conditional," it was advised in the statement. "The Board is confident in Betfair's strategy and growth prospects as it goes through an exciting phase of delivering the new focused strategy announced in December 2012 and improving the Company's financial performance. Following the completion of its financial year ending 30 April 2013, the Company will provide an update at the time of its post close statement on 7 May 2013 on the good progress in the implementation of its strategy, including cost efficiencies, and recent trading performance." It was added by Gerald Corbett, chairman of Betfair: "We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise. Our new management team are implementing the strategy announced in December 2012 and it is this that will realise value for shareholders. We will provide an update to the market on 7 May 2013 to set out the good progress we are making in the implementation of our strategy, including cost efficiencies, and our recent trading performance." In conclusion, the statement reads that it is made without the prior approval of CVC, and there can be no certainty that a further proposal will be made, adding that Betfair shareholders are still advised to take no action.