The online exchange betting firm said that CVC’s 880p-per-share offer was far less than what the company was worth, and promised to push ahead with what it called an exciting new strategy to deliver growth.
Investors appeared to back Betfair’s board yesterday, pushing shares up 4.2 per cent, although at 839p this is still 41p short of CVC’s offer price.
The private equity firm is understood to have been surprised at Betfair’s rejection of its bid, and it is unclear if it will return with a higher offer, given its view that the share price already carries a premium associated with takeover speculation.
“The board of Betfair has reviewed the proposal with its advisers and rejected it on the basis that it fundamentally undervalues the company and its attractive prospects” the firm’s statement said. “The board is confident in Betfair’s strategy and growth prospects as it goes through an exciting phase of delivering the new focused strategy.”
Under former Paddy Power boss Breon Corcoran, who joined last summer, Betfair has exited markets where its peer-to-peer betting system is a legal grey area, and bolstered its fixed odds bookmaking service.
One top 10 shareholder told City A.M. yesterday that it is supportive of the strategy, and did not expect CVC to complete a deal.