{"id":196453,"date":"2021-12-27T09:25:21","date_gmt":"2021-12-27T17:25:21","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=196453"},"modified":"2021-12-27T10:03:54","modified_gmt":"2021-12-27T18:03:54","slug":"fanduel-spinoff-would-generate-cash-for-flutter-entertainment","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/","title":{"rendered":"Flutter Could Use FanDuel Cash for More Deals, Fox Still in Way"},"content":{"rendered":"

Fresh off the $2.2 billion purchase of Italy’s Sisal announced last week, Flutter Entertainment (OTC:PDYPY)<\/span> could be on the prowl for more acquisitions.<\/p>\n

\"Flutter
Flutter could use capital from a FanDuel spinoff for more acquisitions. First, it needs to reach an agreement with Fox. (Image: The Independent<\/em>)<\/figcaption><\/figure>\n

Capital is needed for deals, and an effective avenue for generating that cash is via the much-ballyhooed spin-off, which is being delayed until next year<\/a>. The Sisal acquisition pushes Flutter’s debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) to a still tolerable 3.5x. But that also implies more capital is needed if the company wants to pursue other takeovers.<\/p>\n

The added debt burden may limit its scope for other international deals,\u201d<\/strong> reports The Sunday Times. <\/i>\u201cSeparate listing for FanDuel in New York, as planned, would help. Yet it first needs to settle its differences with Fox.\u201d<\/strong><\/p><\/blockquote>\n

Flutter and Fox Corp. (NASDAQ:FOXA) are engaged in a now months-long legal spat over the price the latter will pay to buy an 18.6 percent slice of FanDuel. Flutter wants what it believes is fair market value, while Fox wants the price the parent company paid — $4.175 billion in December 2020 — when it bought out investment firm Fastball\u2019s 37.2 percent interest<\/a> in FanDuel.<\/p>\n

Flutter owns 95 percent of FanDuel. Boyd Gaming (NYSE:BYD) owns the other five percent.<\/p>\n

Wide Chasm Between Flutter, Fox<\/h2>\n

Buyers and sellers typically want different prices for an asset. But the gap between what Flutter is willing to sell 18.6 percent of FanDuel to Fox at and what the media company is willing to pay is wide.<\/p>\n

As The Sunday Times <\/i>reports, Flutter wants to sell that portion of FanDuel to Fox at what investment bankers estimated it to be worth in Jul,y when sports wagering equities were performing significantly better than they are today.<\/p>\n

\n

Potentially further muddying the waters for Fox is that Flutter investors are clamoring for FanDuel to be valued in excess of rival DraftKings (NASDAQ:DKNG). Those two companies are often joined at the hip<\/a> for investment valuation purposes. But the reality is FanDuel is the largest online sportsbook operator in the US, and holds significantly more market share than its competitor. Even with DraftKings shares shedding nearly 37 percent year-to-date, its market capitalization is $23.64 billion.<\/p>\n<\/div>\n

The gap between what Flutter will sell the interest at and what Fox will pay is reportedly as large as $10 billion, and it’s the source of the aforementioned legal tussle between the two companies.<\/p>\n

In April, Fox confidentially filed a suit against Flutter last week in New York\u2019s Judicial Arbitration and Mediation Services (JAMS). JAMS isn\u2019t a traditional court of law, but its decisions are binding and gives parties a more efficient avenue for settling disputes.<\/strong><\/p>\n

Aiming for Amicable<\/h2>\n

It’s not clear when a JAMS decision will be reached, nor is it clear when Flutter could commence the FanDuel spin-off. But both sides should be motivated to reach an amicable resolution.<\/p>\n

For its part, Fox is also a Flutter investor. It owns 2.5 percent of the gaming company. That relationship stems from Fox selling Sky Bet to The Stars Group (TSG) in 2018 for $4.7 billion. Last year, Flutter shelled out $12.2 billion for TSG<\/a>,, which, at the time, owned Fox\u2019s FOX Bet unit.<\/p>\n

Flutter should want to resolve the matter, too. Because with a FanDuel spinoff, it can unlock shareholder value. That’s while generating capital to firm its balance sheet and pursue other acquisitions to bolster market-leading positions outside the US.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Fresh off the $2.2 billion purchase of Italy’s Sisal announced last week, Flutter Entertainment (OTC:PDYPY) could be on the prowl for more acquisitions. Capital is needed for deals, and an effective avenue for generating that cash is via the much-ballyhooed spin-off, which is being delayed until next year. The Sisal acquisition pushes Flutter’s debt to […]<\/p>\n","protected":false},"author":46,"featured_media":196458,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,60],"tags":[],"acf":[],"yoast_head":"\nFanDuel Spinoff Would Generate Cash For Flutter Entertainment<\/title>\n<meta name=\"description\" content=\"Flutter Entertainment could use FanDuel spinoff cash for more deals, but it needs to make nice with Fox.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FanDuel Spinoff Would Generate Cash For Flutter Entertainment\" \/>\n<meta property=\"og:description\" content=\"Flutter Entertainment could use FanDuel spinoff cash for more deals, but it needs to make nice with Fox.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2021-12-27T17:25:21+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-12-27T18:03:54+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/12\/flutter.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1240\" \/>\n\t<meta property=\"og:image:height\" content=\"700\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/\",\"url\":\"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/\",\"name\":\"FanDuel Spinoff Would Generate Cash For Flutter Entertainment\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/12\/flutter.jpg\",\"datePublished\":\"2021-12-27T17:25:21+00:00\",\"dateModified\":\"2021-12-27T18:03:54+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Flutter Entertainment could use FanDuel spinoff cash for more deals, but it needs to make nice with Fox.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-spinoff-would-generate-cash-for-flutter-entertainment\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/12\/flutter.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/12\/flutter.jpg\",\"width\":1240,\"height\":700,\"caption\":\"The Flutter logo at a corporate office. 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