April 22, 2013 / 6:41 AM / 5 years ago

Gambling firm Betfair rejects CVC-led takeover bid

LONDON, April 22 (Reuters) - Online gambling company Betfair on Monday said it had rejected a $1.4 billion takeover offer from private equity firm CVC Capital Partners and other investors.

Betfair said it had received a preliminary proposal on Friday from CVC, Richard Koch, Antony Ball and partners offering 880 pence per share in cash or an unlisted securities alternative made up of shares and loan notes in a new entity.

Betfair said its board had reviewed the proposal with its advisers and “rejected it on the basis that it fundamentally undervalues the company and its attractive prospects, and is highly conditional”.

Shares in Betfair, which rose 15 percent last week, closed at 805 pence on Friday, valuing the business at around 834 million pounds.

The CVC-led bid values Betfair, which operates an online exchange that allows gamblers to bet against each other, at around 912 million pounds ($1.4 billion).

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 have plummeted to well below the 13 pounds the company listed at.

CVC last week said it had held preliminary discussions with Koch, Ball and other partners about making a possible offer for Betfair.

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.

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