Betfair to float
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Betfair, the online betting exchange, is targeting an autumn stock market listing valuing the company at about £1.5bn, I have learned.
I understand that Betfair held detailed talks earlier this week with its advisers at Goldman Sachs and Morgan Stanley about a plan that would see the company catapulted straight into the FTSE 250 as early as September.
It would be a landmark moment for a company dubbed ‘Britain’s secret Google’ and which was founded just 11 years ago. And it would provide a platform for Betfair to lead the consolidation of the online gaming market.
As I understand it, Betfair’s shareholders will not formally decide to press ahead with the flotation until after the summer break. It will undoubtedly take into account the performance of other IPO candidates, one of which – Fairfield Energy – cancelled its listing this week, before taking a final decision.
One person close to the betting exchange told me today that Betfair was “95 per cent certain” to announce an IPO in September. A flotation would give the company access to capital to accelerate its expansion, both internationally and by moving into other areas that use similar exchange technology.
In one sense, as a tech company with no obvious listed peers, Betfair could be compared to another business experiencing a rather torrid ride as it prepares to go public: the online grocer Ocado.
The similarities between Betfair and Ocado are merely superficial, however. For one thing, Betfair recorded earnings (before interest, tax, depreciation and amortisation) in the year to April 30 2009 of just over £70m. That was on sales of about £300m – a very healthy margin indeed. Ocado, by contrast, has yet to make any money.
I’m told that Betfair, which abandoned an attempt to float in 2005, would be unlikely to use its listing to raise new money by issuing new shares but that some of the existing investors would seek to reduce their shareholdings.
Four blocs of shareholders each own about a quarter of the company, comprising: Ed Wray and Andrew Black, Betfair’s founders; Softbank, the Japanese bank; a group of venture capital investors including Balderton Capital; and company employees.
I understand that Betfair held detailed talks earlier this week with its advisers at Goldman Sachs and Morgan Stanley about a plan that would see the company catapulted straight into the FTSE 250 as early as September.
It would be a landmark moment for a company dubbed ‘Britain’s secret Google’ and which was founded just 11 years ago. And it would provide a platform for Betfair to lead the consolidation of the online gaming market.
As I understand it, Betfair’s shareholders will not formally decide to press ahead with the flotation until after the summer break. It will undoubtedly take into account the performance of other IPO candidates, one of which – Fairfield Energy – cancelled its listing this week, before taking a final decision.
One person close to the betting exchange told me today that Betfair was “95 per cent certain” to announce an IPO in September. A flotation would give the company access to capital to accelerate its expansion, both internationally and by moving into other areas that use similar exchange technology.
In one sense, as a tech company with no obvious listed peers, Betfair could be compared to another business experiencing a rather torrid ride as it prepares to go public: the online grocer Ocado.
The similarities between Betfair and Ocado are merely superficial, however. For one thing, Betfair recorded earnings (before interest, tax, depreciation and amortisation) in the year to April 30 2009 of just over £70m. That was on sales of about £300m – a very healthy margin indeed. Ocado, by contrast, has yet to make any money.
I’m told that Betfair, which abandoned an attempt to float in 2005, would be unlikely to use its listing to raise new money by issuing new shares but that some of the existing investors would seek to reduce their shareholdings.
Four blocs of shareholders each own about a quarter of the company, comprising: Ed Wray and Andrew Black, Betfair’s founders; Softbank, the Japanese bank; a group of venture capital investors including Balderton Capital; and company employees.
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Also you are clearly hellbent in transforming the exchange into a sale able asset, exactly when will you be floating the company which you are itching to do?
We’re certainly trying to run the business well and keep it growing and successful but have no immediate plans to float. As ever, we keep all options open.
We’re certainly trying to run the business well and keep it growing and successful but have no immediate plans to float. As ever, we keep all options open.
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- Posts: 4619
- Joined: Wed Mar 25, 2009 12:23 pm
I would have thought they will wait until America opens up before floating would they not? Especially since some positive signs are coming out of America. Surely if that market was open it would increase their potential value massively?
Also how many times have we heard this story before
Also how many times have we heard this story before

You'd also have thought that they will await clarification regarding the levy situation before floating.
If a large levy might be applied to Betfair's turnover, I won't be buying any shares!
Jeff
If a large levy might be applied to Betfair's turnover, I won't be buying any shares!
Jeff
andyfuller wrote:I would have thought they will wait until America opens up before floating would they not? Especially since some positive signs are coming out of America. Surely if that market was open it would increase their potential value massively?
Also how many times have we heard this story before
True, but perhaps Betfair's thinking is that the economy isn't going to turn a corner any time soon, so it's better not to delay.
Also, if I were Bert, the prospect of increasing my bank balance by 188 million pounds - (0.25/2)*1.5 billion - would appeal to me...
Maybe they are waiting till September so that they can assess the economic situation once the spending cuts have been detailed and the markets have reacted.
Jeff
Also, if I were Bert, the prospect of increasing my bank balance by 188 million pounds - (0.25/2)*1.5 billion - would appeal to me...

Maybe they are waiting till September so that they can assess the economic situation once the spending cuts have been detailed and the markets have reacted.
Jeff
Bet Angel wrote:The IPO market isn't strong at the moment.
http://www.bbc.co.uk/news/business-10708803