Betfair rises as CVC confirms takeover talks

Elizabeth Fournier

SHARES in Betfair rose by as much as 14 per cent yesterday after Formula One owner CVC Capital confirmed it was in talks over a potential offer for the betting exchange.

Private equity group CVC said it had held “preliminary discussions” with investors including LEK Consulting founder Richard Koch and Antony Ball, co-founder of Luxembourg fund Brait’s private equity arm.

Koch already owns a 6.5 per cent stake in the exchange, which was floated by its founders Andrew Black and Ed Wray in October 2010.

Betfair’s shares have had a bumpy ride since the flotation, and though yesterday’s lift bumped them back up to 782p they are still well below the IPO price of £13.

Betfair rose 11.8 per cent yesterday to close at £7.82

Since chief executive Brett Corocan was brought in last year he’s pursued an aggresive streamlining strategy that’s seen the firm exit unregulated markets in Germany, Greece and Cyprus, and target cost cuts of £20m in 2014-15.

“With our new team now in place and the announcement of a more focused strategy in December, I believe Betfair is currently going through one of the most exciting phases in its development,” chairman Gerald Corbett said yesterday, strongly advising shareholders to take no action.

Under the new takeover code rules introduced in 2011, CVC has until 5pm on 13 May to make a firm offer for the firm or walk away.