A New York arbitrator ruled that Fox could buy an 18.6% stake in FanDuel from Flutter Entertainment based on a $20 billion valuation. [Image: Shutterstock.com]
Settlement on the evaluation number
Fox Corporation won the battle to be able to buy an 18.6% stake in FanDuel from the US sports esports parent company based on a December 2020 valuation. A New York court ruled on Friday that Fox would exercise its right to buy the stake, but the price to do so would be 4.1 billion. dollars at least.
It is believed that the acquisition price of Fox will be based on the current fair market value in July 2021
Fox argued that the price should be based on a valuation of $11.2 billion since Flutter Entertainment purchased a 37% stake in FanDuel in December 2020. Flutter believes that the Fox acquisition price will be based on the current fair market value in July 2021.
The arbitrator ended up agreeing that the price would be based on the December 2020 market value, but stated that the real valuation at the time was $20 billion. Several factors were taken into account in arriving at the rating, including a comparison with FanDuel’s main competitor DraftKings.
There is still some uncertainty
Fox issued a statement After the arbitration and mediation services judgment, welcoming the “fair and satisfactory outcome”. It confirmed that it has no obligation to proceed with the exercise of its option to purchase FanDuel’s stake. The option is valid for ten years, expiring December 2030. The arbitrator executed an annual 5% escalator of the purchase price and Fox would have to pay all cash to acquire the stake.
Provides certainty about the cost of buying Fox in this business”
flutter too A statement was issued on the rulingChief Executive Officer Peter Jackson said the ruling “demonstrates the confidence we have in our position on this matter and provides certainty about the cost of Fox’s acquisition of this business”.
Fox believes the ruling means Flutter will not be able to proceed with an initial public offering (IPO) for FanDuel without getting the go-ahead from an arbitrator or approval from Fox. Flutter disagrees with this view and believes that such consent would not be necessary to proceed with FanDuel’s publication publicly.
complicated situation
There has been an ongoing legal proceeding between Fox and Flutter over the issue over a year ago, which Fox began in April 2021. As part of the dispute, Fox Sports has threatened to ban all FanDuel ads from its network.
FanDuel is the leader in the US sports betting market; Flutter Entertainment owns 95% of the operator.
Fox had a 5% stake in The Stars Group before Stars merged with Flutter in May 2020 and holds a ten-year option to buy half of The Stars Group’s business in the United States. After Flutter’s purchase of The Stars Group, Fox acquired a 2.6% stake in Flutter, as well as an option to purchase an 18.6% stake in FanDuel.
