Who could buy Bet365? Bankers salivate, but a takeover is tricky
It takes a lot to surprise London's investment bankers. But reports last week that Bet365, the self-styled 'largest mobile sports wagering brand in the world' was up for sale, blindsided the great and the good of the City.
'My phone has not stopped ringing about it,' said one seasoned betting sector banker. 'But I knew nothing about it beforehand.'
The news that founder Denise Coates, Britain's richest woman and the country's biggest taxpayer, was looking to cash in her chips, left deal-hungry advisers with dollar signs in their eyes.
Reports were that Coates, whose family fortune is estimated to be nearly £7.5 billion, according to The Sunday Times Rich List, had invited advisers to pitch for overseeing either a sale of the Stoke-on-Trent-based business and/or a stock market float. The business could be worth £9 billion, according to The Guardian.
A deal of that size would most likely involve the investment banking titans of Wall Street. Yet for whatever reason, some of them had not been invited to pitch for Bet365.
JP Morgan was completely unaware that Coates had launched a 'beauty parade' as it is known in financial circles, according to City sources. American counterpart Jefferies is understood to have been similarly snubbed.
That a sale is now on the cards should not come as a complete surprise. Bet365 announced in March that it was exiting remote gambling operations in China, where digital wagering is illegal and people could face a prison sentence if caught.
Bet365 has historically had a sizeable remote operation in the country, so the decision to exit was seen as a watershed moment that some interpreted as a preamble to a potential sale, as reported by The Sunday Times in March.
Selling up now makes sense in many ways. The company has had moderate success in the US, where a decades-long ban on sports wagering is being repealed on a state-by-state basis. In the years to come, America will be the world's biggest regulated sports betting market.
Paul Leyland of independent consultancy Regulus Partners said: 'She has built an amazing company, but the complexity of gambling now is that you have to think like a group. Running a group of companies is very different to a company where you have your team around you.
'While she still has the US growth story coming through; while there is still appetite for the sector because nothing truly terrible has blown up… Maybe now is the time.'
But a sale risks bringing Coates into conflict with the very things that she treasures the most: her personal privacy, and that of the company that she started from a Portakabin in a Stoke car park in 2000.
Coates could well shield herself from the limelight on a personal level. But any corporate transaction involving Bet365 is likely to involve a protracted and complicated due diligence process.
Aged 57, Coates has no natural family successor, according to those with knowledge of how the company works. 'It's not like there is a 35-year-old Harvard Business School-educated son or daughter already working in the business and ready to take over,' said one source.
Accordingly a sale may be her only option, if Coates does wish to tap out.
But even so, the population of potential buyers is far from vast. In part this is because betting sector investments are excluded on ethical grounds by many funds. Similarly some bankers, such as Royal Bank of Canada, are not even allowed to advise on gambling sector transactions.
Private equity Apollo, CVC Capital, and Blackstone are likely to be the only funds with the combination the firepower and mandate to buy either all or part of Bet365. They all declined to comment on whether they were interested in a putative bid for Bet365.
Listed suitors are similarly limited. FTSE 100 firm Entain and former counterpart Flutter would most likely be excluded on antitrust grounds.
So perhaps the only public company that could swoop is the US-listed DraftKings — but this is a company that is comparatively cash poor. A DraftKings takeover would undoubtedly involve the Coates family having to take the US firm's shares in part or full payment.
Bet365 declined to comment on reports of a sale this weekend. As for its next steps — all bets appear to be off.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South Wales Argus
an hour ago
- South Wales Argus
FedEx founder Fred Smith dies aged 80
FedEx started operating in 1973, delivering small parcels and documents more quickly than the US postal service could. Over the next half-century, Mr Smith, a veteran US Marine, oversaw the growth of a company that combined air and ground service and became something of an economic bellwether because so many other companies rely on it. Based in Memphis, Tennessee, FedEx grew into a global transportation and logistics company that averages 17 million shipments per business day. Mr Smith stepped down as chief executive in 2022 but remained executive chairman. A 1966 graduate of Yale University, he used a business theory he came up with in college to create a delivery system based on co-ordinated air cargo flights centred on a main hub – a 'hub and spokes' system, as it became known. The company also played a major role in the shift by American business and industry to a greater use of time-sensitive deliveries and less dependence on large inventories and warehouses. Mr Smith once told The Associated Press that he came up with the name Federal Express because he wanted the company to sound big and important when in fact it was a start-up operation with a future far from assured. FedEx revolutionised the express delivery industry (PA) At the time, he was trying to land a major shipping contract with the Federal Reserve Bank that did not work out. In the beginning, Federal Express had 14 small aircraft operating from Memphis International Airport flying packages to 25 US cities. Mr Smith's father, also named Frederick, built a small fortune in Memphis with a regional bus line and other business ventures. Following college, Mr Smith junior joined the US Marines and was commissioned a second lieutenant. He left the military as a captain in 1969 after two tours in Vietnam where he was decorated for bravery and wounds received in combat. He told The Associated Press in a 2023 interview that everything he did running FedEx came from his experience in the Marines, not what he learned at Yale. Getting Federal Express started was no easy task. Overnight shipments were new to American business and the company had to have a fleet of planes and a system of interconnecting air routes in place from the start. Though one of Memphis's best-known and most prominent citizens, Mr Smith generally avoided the public spotlight, devoting his energies to work and family. But despite his low profile, he made a cameo appearance in the 2000 movie Castaway starring Tom Hanks. The movie was about a FedEx employee stranded on an island. 'Memphis has lost its most important citizen, Fred Smith,' said US representative Steve Cohen of Tennessee, citing the FedEx's founder's support for everything from the University of Memphis to the city's zoo. 'FedEx is the engine of our economy, and Fred Smith was its visionary founder. But more than that, he was a dedicated citizen who cared deeply about our city.'
Glasgow Times
an hour ago
- Glasgow Times
FedEx founder Fred Smith dies aged 80
FedEx started operating in 1973, delivering small parcels and documents more quickly than the US postal service could. Over the next half-century, Mr Smith, a veteran US Marine, oversaw the growth of a company that combined air and ground service and became something of an economic bellwether because so many other companies rely on it. Based in Memphis, Tennessee, FedEx grew into a global transportation and logistics company that averages 17 million shipments per business day. Mr Smith stepped down as chief executive in 2022 but remained executive chairman. A 1966 graduate of Yale University, he used a business theory he came up with in college to create a delivery system based on co-ordinated air cargo flights centred on a main hub – a 'hub and spokes' system, as it became known. The company also played a major role in the shift by American business and industry to a greater use of time-sensitive deliveries and less dependence on large inventories and warehouses. Mr Smith once told The Associated Press that he came up with the name Federal Express because he wanted the company to sound big and important when in fact it was a start-up operation with a future far from assured. FedEx revolutionised the express delivery industry (PA) At the time, he was trying to land a major shipping contract with the Federal Reserve Bank that did not work out. In the beginning, Federal Express had 14 small aircraft operating from Memphis International Airport flying packages to 25 US cities. Mr Smith's father, also named Frederick, built a small fortune in Memphis with a regional bus line and other business ventures. Following college, Mr Smith junior joined the US Marines and was commissioned a second lieutenant. He left the military as a captain in 1969 after two tours in Vietnam where he was decorated for bravery and wounds received in combat. He told The Associated Press in a 2023 interview that everything he did running FedEx came from his experience in the Marines, not what he learned at Yale. Getting Federal Express started was no easy task. Overnight shipments were new to American business and the company had to have a fleet of planes and a system of interconnecting air routes in place from the start. Though one of Memphis's best-known and most prominent citizens, Mr Smith generally avoided the public spotlight, devoting his energies to work and family. But despite his low profile, he made a cameo appearance in the 2000 movie Castaway starring Tom Hanks. The movie was about a FedEx employee stranded on an island. 'Memphis has lost its most important citizen, Fred Smith,' said US representative Steve Cohen of Tennessee, citing the FedEx's founder's support for everything from the University of Memphis to the city's zoo. 'FedEx is the engine of our economy, and Fred Smith was its visionary founder. But more than that, he was a dedicated citizen who cared deeply about our city.'
Western Telegraph
an hour ago
- Western Telegraph
FedEx founder Fred Smith dies aged 80
FedEx started operating in 1973, delivering small parcels and documents more quickly than the US postal service could. Over the next half-century, Mr Smith, a veteran US Marine, oversaw the growth of a company that combined air and ground service and became something of an economic bellwether because so many other companies rely on it. Based in Memphis, Tennessee, FedEx grew into a global transportation and logistics company that averages 17 million shipments per business day. Mr Smith stepped down as chief executive in 2022 but remained executive chairman. A 1966 graduate of Yale University, he used a business theory he came up with in college to create a delivery system based on co-ordinated air cargo flights centred on a main hub – a 'hub and spokes' system, as it became known. The company also played a major role in the shift by American business and industry to a greater use of time-sensitive deliveries and less dependence on large inventories and warehouses. Mr Smith once told The Associated Press that he came up with the name Federal Express because he wanted the company to sound big and important when in fact it was a start-up operation with a future far from assured. FedEx revolutionised the express delivery industry (PA) At the time, he was trying to land a major shipping contract with the Federal Reserve Bank that did not work out. In the beginning, Federal Express had 14 small aircraft operating from Memphis International Airport flying packages to 25 US cities. Mr Smith's father, also named Frederick, built a small fortune in Memphis with a regional bus line and other business ventures. Following college, Mr Smith junior joined the US Marines and was commissioned a second lieutenant. He left the military as a captain in 1969 after two tours in Vietnam where he was decorated for bravery and wounds received in combat. He told The Associated Press in a 2023 interview that everything he did running FedEx came from his experience in the Marines, not what he learned at Yale. Getting Federal Express started was no easy task. Overnight shipments were new to American business and the company had to have a fleet of planes and a system of interconnecting air routes in place from the start. Though one of Memphis's best-known and most prominent citizens, Mr Smith generally avoided the public spotlight, devoting his energies to work and family. But despite his low profile, he made a cameo appearance in the 2000 movie Castaway starring Tom Hanks. The movie was about a FedEx employee stranded on an island. 'Memphis has lost its most important citizen, Fred Smith,' said US representative Steve Cohen of Tennessee, citing the FedEx's founder's support for everything from the University of Memphis to the city's zoo. 'FedEx is the engine of our economy, and Fred Smith was its visionary founder. But more than that, he was a dedicated citizen who cared deeply about our city.'
