Online gambling firm Betfair has rejected CVC Capital Partners’ take over bid. We answer five questions on why the company rejected the bid.
What offer did CVC Capital Partners make to Betfair?
CVC, which also owns Formula 1, made a preliminary bid of 880p per share to take over Betfair, offering the company around £912m in total.
Why did Betfair reject this bid?
According to The Telegraph, the company said in a statement released today that the offer “fundamentally undervalues the Company and its attractive prospects".
According to the market, how much is Betfair worth?
On Friday shares in Betfair closed at 805p, which values the business at about £834m.
What else has Betfair said?
Betfair's chairman, Gerald Corbett, speaking to The Telegraph, said: "We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise.”
He added: "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."
How well have Betfair done in recent years?
The company, which was founded in 2000 by Ed Wray – a former JP Morgan trader – and former professional gambler Andrew Black, has struggled over the last two-and-a-half years that it has been a public company.
Its shares fell dramatically from its IPO price of £13 a share, following an over-hyped flotation, and last December it announced it was pulling out of Russia and Canada because of their unclear gambling regulations, despite the fact the markets made up almost a quarter of the company’s revenue.