Private equity firm CVC circles £750m Betfair

THE PRIVATE equity firm behind Formula One has targeted online bookie Betfair as its next acquisition opportunity.

CVC Capital Partners is believed to have the company in its sights, two and a half years after Betfair floated at a value more than double what it is now worth.

Moves to acquire the company are at an early stage, with CVC yet to arrange financing for the deal. One source said that the private equity group has not yet approached Betfair about a potential buyout.

The online bookie has seen its market value wane since its initial public offering in October 2010, when it floated at over £15 per share. On Friday the company’s shares fell below £7 per share, although they have risen in value since January on bid speculation. Its current market capitalisation is around £720m, although CVC would have to pay slightly more for the firm.

Betfair is best known for its exchange model, in which punters bet against each other rather than the bookmaker itself, and Betfair skims money from the winner. However, under Breon Corcoran, the chief executive who joined from PaddyPower last summer, Betfair has a new focus on its fixed odds business, which operates like a traditional bookie. It recently bought the customer database from loss-making bookie Blue Square, and has removed its exchange model from certain markets where there is a legal grey area.

Its exchange business also faces new competition from Ladbrokes, which bought exchange betting operator Betdaq recently. CVC, whose interest was first revealed by Sky News, did not comment.