* CVC and partners studying bid
* Funding not yet in place
* Shares jump 10 percent
By Rhys Jones and Keith Weir
LONDON, April 15 Online gambling company Betfair
is the target of a possible takeover offer from the
private equity firm that owns Formula One motor racing.
CVC Capital Partners on Monday said it was in talks
with investors about the possibility of making a joint offer for
Betfair, which has a market value of around 800 million pounds
Since joining the London stock exchange three years ago,
Betfair has lost ground to competitors at home and is pulling
out of markets where gambling regulations are unclear, which
provide almost a quarter of its revenue.
Shares in Betfair, which operates an online exchange that
allows gamblers to bet against each other, have plummeted to
well below the 13 pounds the company listed at.
Chief Executive Breon Corcoran, who joined Betfair from
Irish bookmaker Paddy Power last year, said shortly after his
appointment that the company had "lost its way somewhat".
Betfair is in the process of pulling back from some markets
to focus on areas where gambling regulations are clearly defined
in a bid to reduce uncertainty and volatility for its investors.
The firm recently said it would pull out of Germany and
Greece because of problems over licences and punitive tax rates.
"We remain fully committed to delivering on the new strategy
and providing improved returns for our shareholders," Chairman
Gerald Corbett said in a statement on Monday.
Betfair shares were 10.2 percent higher at 7.71 pounds by
Many analysts say the company has suffered from failing to
identify clearly if it regarded itself as a gambling or a
CVC said it had held preliminary discussions with investors
Richard Koch, Antony Ball and other partners about Betfair,
which could include an offer for the firm by funds advised by
CVC together with the two men and partners.
Koch, a co-founder of international strategy consultancy LEK
Consulting, holds a 6.5 percent stake in Betfair. Ball is a
non-executive director at Luxembourg-listed investment group
Brait and is the co-founder of its private equity business.
A source familiar with the situation said the potential
bidders had yet to meet the Betfair board or to put finances in
place for a bid.
CVC has been involved in the gambling sector before, having
bought leading British bookmaker William Hill in 1999
and selling it three years later.