Skip to main content

Market Overview

How A FanDuel IPO Could Be Impacted By Fox, Flutter Entertainment Valuation War

Share:
How A FanDuel IPO Could Be Impacted By Fox, Flutter Entertainment Valuation War

A FanDuel initial public offering in the U.S. could be delayed by a legal battle between two owners of the sports betting company.

What Happened: A lawsuit has been filed by Fox Corporation (NASDAQ: FOX) (NASDAQ: FOXA) against Flutter Entertainment (Pink: PDYPY). 

“Fox Corporation has filed suit against Flutter to enforce its rights to acquire an 18.6% ownership interest in FanDuel Group, an American sports betting brand, for the same price that Flutter paid for that interest in December 2020,” Fox said in a Tuesday statement.

Related Link: Sports Betting ETF Co-Founder Talks SPACs, Undervalued Foreign Exchange Plays 

Why It’s Important: As part of its acquisition of The Stars Group, Flutter Entertainment and Fox reached a deal over the Fox Bet joint venture between TSG and Fox.

Fox gave up ownership of Fox Bet to Flutter and received options to acquire 50% of Fox Bet as well as 18.5% of FanDuel.

Flutter Entertainment upped its stake in FanDuel from 57.8% to 95% in December. The company acquired a stake from Fastball Holdings for $4.2 billion.

Fox's lawsuit calls for the media company to buy the stake in FanDuel based on the $11.2-billion valuation set in December. FanDuel could be valued at $30 billion on the open market, according to LegalSportsReport.

Fox could also have leverage in a legal battle, with sources telling LegalSportsReport that Fox can keep The Stars Group assets like FoxBet and Poker Stars in a potential FanDuel IPO.  

Flutter Entertainment is exploring an IPO for Fanduel, which would bring a pure play sports betting company public that could compete with DraftKings Inc (NASDAQ: DKNG) given its strong brand name, dominant market share and large customer pool.

“What is a surprise, and a positive one at that, is the valuation. The implied FanDuel valuation of $11.2 billion is a significant discount to DraftKings,” Roundhill Investments CEO Will Hershey told Benzinga in December. Roundhill runs the Roundhill Sports Betting & iGaming ETF (NYSE: BETZ).

Flutter initially invested in FanDuel in 2018 at a valuation of $1 billion, according to Hershey.

“From a strategic perspective, it’s now increasingly possible that Flutter may look to spin-off all or part of its stake in FanDuel onto a U.S. exchange, unlocking shareholder value.”

Boyd Gaming (NYSE: BYD) owns a 5% stake in FanDuel.

FOXA, PDYPY Price Action: Class A Fox shares were up 0.43% at $37.21 at last check Wednesday. Flutter shares were down 1.19% at $106.71. 

 

Related Articles (BYD + BETZ)

View Comments and Join the Discussion!

Posted-In: Fanduel LegalSportsReportNews Legal Sports Media Trading Ideas General Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com