Paddy Power may pay €140m to buy Sportsbet
PADDY Power may pay as much as €140m to buy out the remaining shareholders in Australian firm Sportsbet. Photo: Bloomberg
Sunday June 28 2009
PADDY Power, the €800m- valued listed bookmaker, may end up paying as much as €140m to buy out the remaining shareholders in Australian firm Sportsbet.
Under a complex earn out arrangement, Paddy Power may have to pay the equivalent of up to seven times the Australian company's earnings over a three-year period to mop up the final 49 per cent.
However, Paddy Power boss Patrick Kennedy has inked a slick deal, which could see him up his stake in Sportsbet for next to nothing if the Australian bookmaker's profits fall below current levels.
Paddy Power has sent a number of key personnel from its Irish operation to Australia to help run its new business.
With a slowdown in the Irish betting market, Paddy Power has sought opportunities abroad to maintain its fast growth rate.
The company is thought to have been investigating the Australian market for at least 18 months before spending €33m to buy a 51 per cent stake in Sportsbet. It funded a deal to buy €22m-valued online gambling firm IAS.
Following its blitzkrieg of acquisitions, the Irish company now controls two of the four main online operators in Australia.
Paddy Power is taking on giant state gambling monopoly Tabcorp. The Irish bookie is trialling a new betting system in Australia which may blow the market wide open. The company has introduced a touch screen betting terminal into a machine, like a betting ATM, into a vast sports pub in Melbourne. It is thought that there are plans to trial around 30 of these new terminals in hotels and bars in Victoria.
These new terminals present a clear challenge to Tabcorp's state-awarded gambling monopoly.
Tabcorp is understood to have filed an official complaint with the Victorian Commission for Gambling Regulation, which has written to Paddy Power in recent days.
- Nick Webb
