Flutter-Stars Multibillion Merger Followed by €900-Million Share Sale That Would Boost Gambling Giant’s Financial Flexibility

Only several weeks after the completion of its multibillion merger with The Stars Group, Flutter Entertainment has rolled out a share sale, which is expected to raise no less than €900 million. As revealed by the gambling operator, the transaction was initiated as part of the group’s efforts to reduce its debt burden in a volatile and uncertain market after its merger with The Stars Group, with the share sale set to make it financially flexible to take advantage of some opportunities that might follow the coronavirus crisis.

After the closure of the Dublin stock market yesterday, Flutter Entertainment revealed that it has hired Davy and Goldman Sachs to place 8.045 million new shares in the market. As mentioned above, the move is expected to raise at least €900 million, considering a 5% typical discount that usually applies to such deals.

Previously, Flutter Entertainment has shared that it expected the merger to leave the gambling company with net debt of more than 3.5 times its EBITDA (earnings before interest, tax, depreciation and amortisation), excluding synergies. Now, the gambling giant has shared expectations that the net debt would be about 0.9 times its EBITDA by the end of 2020, based on the projection that its annual earnings will amount to €950 million.

Flutter Shares 10% Revenue Increase and Confirms Interest for Further Growth in the US

The gambling group has shared that the coronavirus pandemic could trigger a faster pace of regulation in the US, as well as an increasing number of US states looking for new ways to raise some extra sources of tax income. The enlarged group confirmed its willingness to provide its US arm with the best possible platform that would guarantee its future success.

Apart from that, Flutter Entertainment confirmed that it remains interested in investing to secure additional market access deals in several US states.

The gambling company revealed a 10% revenue increase in the period from the beginning of April to May 17th, saying that the result was boosted by a 92% surge in revenues generated by The Stars Group. Also, the Australian and US units of the operator reported other significant increases, of 56% and 61%, respectively.

As explained by Flutter Entertainment, poker and online gaming revenues increased because of the positive effect that strong customer engagement during the social isolation period of the coronavirus pandemic. Furthermore, it revealed that growth has started to become moderate as the restrictive measures have become more relaxed and shared expectations that the trend would accelerate as more restrictions are loosened.

Earlier in May, the UK Gambling Commission (UKGC) warned gambling operators to tighten their player protection and customer interaction measures after an increase in online gambling operations was registered during the nationwide Covid-19 shutdown.

  • Author
Olivia Cole

Olivia Cole

Olivia Cole has worked as a journalist for several years now. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.
Daniel Williams
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