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Flutter welcomes arbitration ruling over Fox’s FanDuel option

Posted: Nov 07, 2022 09:57 Category: Americas , Regulatory , Sportsbetting , Posted by Sharon Singleton

Flutter Entertainment has welcomed an arbitration ruling that would oblige Fox Corp to pay full market value should it decide to exercise its option to buy an 18.6 percent stake in FanDuel.

The arbitration ruling found that the exercise price would be based on a FanDuel valuation of $20 billion as of December 2020. This would mean that Fox needs to pay $3.7 billion, plus a 5 percent annual carrying value adjustment, taking the price to $4.1 billion. 

Fox has a ten-year period from December 2020 to exercise the option should it wish to do so.

The price Fox will need to pay compares with the implied valuation for FanDuel of $11.2 billion when Flutter bought a 37.2 percent stake in the U.S. sports betting company from Fastball. Based on this valuation, Fox had sought to pay $2.1 billion for the option. 

The case went to the New York-based Judicial Arbitration and Mediation Services tribunal in April, 2021. 

Flutter vindicated over option ruling

The “ruling vindicates the confidence we had in our position on this matter and provides certainty on what it would cost FOX to buy into this business, should they wish to do so. FanDuel is winning in the US market and the clear #1 operator, a position driven by its exceptional market leading product and efficiency in acquiring customers at scale,” Flutter CEO Peter Jackson said in a statement.  “The team remains focused on maintaining our leadership position and we look forward to updating the market on our progress at our US capital markets day on 16th November.”

The remaining matter before the tribunal is whether and, if so, under what conditions FOX is entitled to participate in an IPO of a parent company of FanDuel, should one occur.  

Flutter has agreed that it will not proceed with any potential IPO, if at all, until the tribunal has resolved this remaining matter or both parties have reached an agreement on the matter. A binding decision from the arbitrator on this point is expected in early 2023.

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