FanDuel Parent Considering IPO As Investors Push For Spinoff
In This Article:
Traders could be getting a new way to get in on the action over online sports betting.
What Happened: Ireland-based Flutter Entertainment Plc (OTC: PDYPY) is considering a spinoff in the US — with an IPO among the options — for its company FanDuel, Bloomberg and CNBC have reported.
Flutter in December announced that it was paying $4.2 billion to increase its stake in FanDuel to 95%. But pressure is mounting from investors who expected that to be the lead-up to a spinoff of FanDuel, CNBC reported. Flutter shares have been trading at a discount to competitor DraftKings, to investors' frustration.
Fox Corporation's (NASDAQ: FOX) Fox Sports could complicate or slow any potential deal. Fox Sports holds a 2.5% stake in Flutter and has an option to buy an 18.5% stake in FanDuel in July.
See related: Flutter Buys Larger FanDuel Stake, Takes DraftKings Head On In US
Why It Matters: Online sports gambling is a hot market as more states legalize the activity.
FanDuel is a top competitor to DraftKings Inc (NASDAQ: DKNG), which went public in one of last year's most successful SPAC mergers. DraftKings shares ended last week at $71.75, up over 600% from their original $10 offering price.
FanDuel could see similar success by going public. FanDuel had $967 million in revenue last year, compared to DraftKings' $644 million.
Photo courtesy Flutter.
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