Flutter shares reach 10-month high on buyout rumours
Paddy Power operator tells EGR it knows of “no material reason” behind surge in share activity
Flutter Entertainment’s shares continued to trade at a 10-month high on Thursday morning amid rumours of a private equity takeover of the company.
Shares in the Paddy Power owner peaked on Wednesday at 7,130p just after 11am, up almost 20% from open, and have since settled around 6,920p on Thursday.
Flutter share price today
Trading volume in the stock was almost five times as high as the 20-day average, according to Bloomberg.
The operator itself told EGR it knew of “no material reason” for the share price movements, although FT Alphaville’s daily markets chat speculated a PE takeover was an option.
Eilers & Krejcik analyst Chris Grove said in a note that the rumour mill “focused primarily on Blackstone“.
The business is facing increased scrutiny on its grey market activity following an FT article called ‘Backdoor to Betfair’ this week, and one source suggested that going private could help the company preserve and pursue that activity.
Flutter had not put out a formal statement to the stock market at the time of writing.
What’s happening in Paddy Power that I’ve missed? Rushing like Ian on the stockmarket today.
— Mikael Pawlo (@mpawlo) July 3, 2019
Gambling stocks across the sector saw gains Wednesday, in part thanks to a Deutsche Bank note that said: “The sell-off observed in the online betting industry is a good opportunity to focus on cheap Internet-based companies, in a market with structural growth and valuation discounts currently being observed. ”
“These companies offer high margins, and overall, an annual growth rate of the gross operating surplus of 10% over the next two years (… ) We see the opportunity to create value from another wave of consolidation, with higher regulatory and marketing costs leading to cost savings, given potential material synergies.”
https://twitter.com/gamblinglamb/status/1146410086144925696