Wednesday 16 October 2019

Paddy Power Betfair merger creates 207 millionaires

Shares rise sharply after €7.5bn gambling deal welcomed by investors, write Nick Webb and Sarah McCabe

Paddy Power's share price has risen tenfold since the financial crisis
Paddy Power's share price has risen tenfold since the financial crisis

Nick Webb and Sarah McCabe

Paddy Power now has 207 'millionaire' shareholders after markets reacted positively to plans to create a €7.5bn gambling giant by merging with rival Betfair.

Shares in the company jumped 20pc last week, making paper millionaires of a total 207 shareholders. This is based on a share register viewed by the Sunday Independent which revealed the number of shareholder accounts holding 10,000 or more shares - which at Friday's €96 share price translates to a value of €1m or more.

Paddy Power's share price has risen tenfold since the financial crisis. The Irish bookmaking company was established in 1988 by the merger of 40 shops owned by John Corcoran, Stewart Kenny and David Power. Power is the company's largest individual shareholder with a 7.89pc stake of 3.86m shares, worth around €367m, according to its latest annual report. Corcoran had 1.32m shares worth around €127m. Kenny has a stake worth close to €38m.

Former Paddy Power CEO Patrick Kennedy - who left the group in January - held shares worth over €55m at the end of last year. Outgoing chief executive Andy McCue held shares worth over €800,000. He has also been conditionally awarded 75,000 options under a bonus scheme, which will show a €3m paper profit if they vest in full.

Former Paddy Power chief operating officer Breon Corcoran resigned from the bookie to join rival Betfair in November 2011. This meant that he did not receive almost €1.39m worth of a bonus due to him. He had 270,000 shares in Paddy Power before leaving, which are worth close to €26m at current prices. Corcoran also received a "golden hello" bonus when he joined Betfair; this scheme paid out close to €13.6m last year after he grew the company spectacularly.

It is not clear whether either company's bonus schemes will pay out early if the merger goes through.

The plan to create one of the world's largest bookmakers was made public unusually early in the process by Paddy Power, whose hand was forced by its half-year results.

The two companies have still not decided if it will be done in the form of a merger, a takeover by Paddy Power or a takeover by Betfair. Either way, Paddy Power shareholders will own 52pc of the new entity which will have revenue of €2bn.

Sunday Indo Business

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