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Betfair to go private again?

Interesting reports emerged over the weekend about the possibility of a buyer for Betfair. It turns out the firm behind it specialise in management takeovers so that sounds like some of the existing shareholders stepping in to buy the firm back, rather than see it continue to look like a lame duck on the public markets.

CVC in talks over Betfair takeover bid

CVC Capital Partners, the owner of Formula One, has held talks about a takeover bid for Betfair, the online gambling exchange.

The private equity firm said on Monday that it had held preliminary discussions with Richard Koch, Antony Ball and partners about Betfair, which could include an offer for the firm by funds advised by CVC together with the two men and partners.

Betfair shares jumped as much as 14pc in early trading in London.

Mr Koch, an author, investor and co-founder of LEK Consulting, holds a 6.9pc stake in Betfair. Mr Ball is a non-executive director at Luxembourg-listed investment group Brait and is the co-founder of its private equity business.

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So what would this mean for the company and punters? I suppose it depends on what instigated this. Was it shareholders pissed off at pressures from other investors and where the company was going? That's quite common in floated companies - read the Richard Branson autobiography for a prime example. Do these particular shareholders still see Betfair as it began, as the punter's friend and a major contrast from the High St bookies they were taking on? Do they disagree with the company's cautious stance re grey markets (pulling out of countries with debatable legislation against bookmakers/exchanges) and want to take the firm back to remove the 'overcompliance' demanded by being a public company? Or do they have such faith in the new Breon Corcoran regime that they see massive potential in the value of the company and based on that, think it is a bargain at the moment?

For the punter, the best option of those above would be if the long-time shareholders were embarrassed by Betfair's current image with the smarter than average punter. The days of loving Betfair as a company are long gone. Betdaq powered by Ladbrokes might have a remote chance of capturing that. Perhaps that prospect of genuine competition for a change has inspired the buyout idea. More than likely, this is existing shareholders thinking (rightly or wrongly) there is still value in the company and wanting to take control of the firm back, rather than allowing the public/hedge funds/any other investors steer an ultra-conservative path.

I imagine we will hear more as this story unravels.

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Mark Davies, one of the founders, posted these thoughts on his blog - very interesting reading...

Thoughts on the Betfair bid

Fantasy Betfair

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