A recent legal judgment favored Flutter Entertainment in its disagreement with Fox Corporation concerning the worth of FanDuel. The panel supported Flutter’s appraisal of FanDuel at $20 billion, a sum grounded in market rate as of December 2020.
This evaluation originates from Flutter’s purchase of a 37.2% portion of FanDuel from Fastball Holdings, suggesting a value of $11.2 billion then. The arbitration result essentially establishes the cost Fox is obligated to pay to utilize its right to acquire an 18.6% stake in FanDuel at $20 billion.
Nevertheless, this price comes with a 5% yearly compounded interest, signifying that should Fox choose to execute its option prior to December 2030, the true expense could hit $22 billion. This would equate to a substantial $4.1 billion cost for Fox to secure its 18.6% share in FanDuel.
The conflict emerged in April 2021 when Fox commenced arbitration actions, pointing to discrepancies regarding the conditions of its option to purchase the FanDuel stake. Fox subsequently presented two further assertions, encompassing an accusation that Flutter had not sufficiently backed the operations of Fox Bet, their collaborative venture. However, the panel rejected Fox’s claims, confirming that Flutter had furnished commercially sound resources to Fox Bet.
A possible hurdle for the FanDuel public offering involves a clash between Fox and Flutter (the parent company of FanDuel) regarding the terms of the issuance. Flutter has indicated that any IPO is postponed until an arbitration judgment resolves their current conflict or a shared understanding is achieved.
An arbitrator’s determination is anticipated in the early months of the coming year.
Flutter CEO Peter Jackson conveyed assurance in their stance, noting that the arbitration proceedings will furnish clarity on the cost Fox would be required to remit if they opt to purchase the enterprise.
He went on to commend FanDuel’s achievements in the American market, underscoring their exceptional product, dominant market share, and remarkable customer acquisition rate. He stressed their unchallenged standing as the top player in the sector.
Regarding future prospects, Jackson revealed that the team remains committed to upholding their leading position and will deliver a progress report to the market during the US Capital Markets Day on November 16th.
