The financial sections of Sunday's papers got all excited about rumours of a Betfair float again.
Betfair considers £1.5bn flotation
The logic is all wrong. The company has been profitable every year since it began. Its cash reserves are huge and there would be little benefit in going to market. The company does however need an exit strategy for the next maturing staff share plan in October, and if and when Andrew Black decides to step away completely from the business, which is a possibility as he has little to do with the firm apart from board activity these days. A full-scale float in either of those cases is unlikely to be required. The other option would be if major investor Softbank wanted to bail out, but that's unlikely after just a couple of years, unless they have issues elsewhere. Or perhaps a listed company would look better to American authorities if the market there was opening up....
Betfair will float eventually. They have been reporting like a floated company and preparing for the relevant corporate governance and responsibility for years. Unless they suddenly wanted to buy a land casino or a major competitor, I'd be very surprised if they floated in the near future. This talk has happened several times before, Betfair were serious about it when they appointed Stephen Hill as CEO a few years back, but they decided it wasn't right at the time and Hill departed soon after. Journos love something to talk about on quiet news days, and it's not as if there have been many big IPOs lately with the state of the economy!
Footnote - I no longer have anything to do with Betfair apart from writing the occasional article for them and drinking with ex-colleagues occasionally, none of whom would be involved in any decision-making process regarding an IPO.
Betfair considers £1.5bn flotation
The logic is all wrong. The company has been profitable every year since it began. Its cash reserves are huge and there would be little benefit in going to market. The company does however need an exit strategy for the next maturing staff share plan in October, and if and when Andrew Black decides to step away completely from the business, which is a possibility as he has little to do with the firm apart from board activity these days. A full-scale float in either of those cases is unlikely to be required. The other option would be if major investor Softbank wanted to bail out, but that's unlikely after just a couple of years, unless they have issues elsewhere. Or perhaps a listed company would look better to American authorities if the market there was opening up....
Betfair will float eventually. They have been reporting like a floated company and preparing for the relevant corporate governance and responsibility for years. Unless they suddenly wanted to buy a land casino or a major competitor, I'd be very surprised if they floated in the near future. This talk has happened several times before, Betfair were serious about it when they appointed Stephen Hill as CEO a few years back, but they decided it wasn't right at the time and Hill departed soon after. Journos love something to talk about on quiet news days, and it's not as if there have been many big IPOs lately with the state of the economy!
Footnote - I no longer have anything to do with Betfair apart from writing the occasional article for them and drinking with ex-colleagues occasionally, none of whom would be involved in any decision-making process regarding an IPO.
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