After a week of careful consideration, Betfair has chosen to turn down a $1.38 billion bid from CVC Capital Partners. The largest shareholder of the Formula One group, CVC had offered Betfair eight pounds and eighty pence per share, a little over half of the price of each share when it was first launched on the London Stock Exchange in 2010.
The reason for Betfair turning down the bid was that the Board of the company believed the price was too low. In a statement released by Betfair on the bid, it stated that the bid fundamentally undervalued the company and its attractive prospects for the future. It also stated that the bid was “highly conditional”.
These sentiments were echoed by Betfair Chairman Gerald Corbett. Mr Cobrett stated that the solid position of Betfair meant that the bid was not appealing enough to him nor his senior company colleagues.
“We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise,” Mr Corbett said. “Our new management team are implementing the strategy announced in December 2012 and it is this that will realise value for shareholders. 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.”