Betfair plunges in trading after Softbank sells out major stake

 
Michael Bow
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TRADERS sent shares in gambling outfit Betfair tumbling 4.5 per cent yesterday after a 10.6 per cent stake in the company was sold by a unit of Japanese firm Softbank.

Close to 11m shares were placed by German investment bank Deutsche Bank in an accelerated bookbuild on behalf of the Softbank unit Charlton Corporation for an undisclosed price. The shares are thought to have been placed with large institutional investors.

The sale of 11m would be worth £96m at Friday’s closing price of 879.5p and amount to about 10.57 per cent of the company’s market capitalisation.

Softbank bought into Betfair in 2006 when shares were riding high at 1,320p. The company, which is set to complete its $21.6bn mega takeover of US wireless network Sprint Nextel tomorrow, would recognise a big loss on its stake if the shares were sold at a discount, or even at par.

Betfair was subject to an aborted £1bn takeover bid by private equity house CVC Capital Partners in May, with an offer price of 975p being knocked back by the company’s chief executive Breon Corcoran.

Shares in the FTSE-250 listed betting company closed the day down 4.49 per cent at 840p, having opened at 883p.