Flutter Raises $1 Billion of Capital as Fox Boosts Investment

(Bloomberg) -- Flutter Entertainment Plc, the world’s biggest online gambling company, has raised money through an investment from Fox Corp. to take advantage of opportunities presented by the pandemic.

Flutter, which owns the Paddy Power, Poker Stars and Sky Bet brands, said in a statement Friday it placed 8.05 million new shares at a 4.7% discount to Thursday’s closing price, raising 812 million pounds ($1 billion). Flutter shares fell 2.9% at 8:04 a.m. in London.

“COVID-19 will likely result in a faster rate of US sports betting legalization, potentially followed by online casino legalization,” James Wheatcroft, equity analyst at Jefferies, said in a note. “This placing positions Flutter to take advantage of the enlarged market opportunity.”

Fox is investing because it is “bullish about the the opportunities in the digital sports wagering market,” Lachlan Murdoch, Chief Executive Officer at Fox, said in a statement, which did not reveal how much Fox would invest.

There has been a flurry of share sales this week, with almost $5 billion announced after the close of trading Tuesday as large investors take advantage of rebounding indexes to offload stakes, and as companies attempt to shore up cash balances amid the coronavirus crisis.

Flutter agreed to buy Toronto-based The Stars Group Inc. in October in a $6 billion all-share deal to take advantage of opportunities in the U.S. after the Supreme Court legalized sports betting.

While Flutter had a U.S. presence -- it owns the FanDuel fantasy sports site -- prior to the Stars deal, almost half its revenue came from Britain, where tighter rules on fixed-odds betting terminals and higher taxes for online betting have upended the industry.

“Faster deleveraging and firepower to compete more aggressively against weakened competitors are further material benefits,” Jefferies’ Wheatcroft wrote.

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