FanDuel & Fox Battle Stalling Flutter Entertainment from IPO Process
Flutter Entertainment plc, a global sports betting company, is in a predicament over a FanDuel IPO because of Fox. Flutter Entertainment, which owns 95% of FanDuel, wants to list the sportsbook as an IPO in the stock.
Listing FanDuel, the top sportsbook in the United States, as an IPO would create a lot of revenue for Flutter. However, Fox Entertainment, which has a 2% stake in Flutter, has derailed the IPO process. It does not appear that it will be listed anytime soon because of Fox.
Fox wants in on the action, but Flutter is not budging on the price.
Fox Battles Flutter Entertainment Over FanDuel IPO
Fox and Flutter Entertainment are in a legal battle over FanDuel. It’s unclear who will win, but the legal delays have caused a FanDuel IPO to vanish.
Fox and Flutter allegedly had a deal for the media company to purchase a significant portion of FanDuel. Fox Entertainment’s legal representatives claimed that they had an agreement with Flutter to purchase a substantial stake of FanDuel for a specific price, but neither side can agree.
Fox Entertainment wanted a piece of FanDuel that’s six times larger than its sale price. This was approximately $1,898,384,000, but this hefty stake would earn Fox Entertainment a lot of money if FanDuel were public.
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Flutter Disagrees on the Price
Flutter wants to sell FanDuel stock to Fox for 12 times the sales estimate. This model aligns with DraftKings’ strategy before going public. This would double Fox’s bill for Flutter Entertainment.
$1.898 billion is a lot of money, even for Fox Entertainment. Therefore, Fox being forced to pay double this amount is not being received well.
Flutter believes that FanDuel should be sold at 12 times the sale price because the platform is on the same level as DraftKings in the betting industry. Additionally, DraftKings is FanDuel’s main competitor so
Legal Disputes Stalling IPO
This issue will be settled in court, but the case will not be quick. Fox is suing Flutter over the dispute, and a judgment is not expected until late in 2022. This removes all hope of a FanDuel IPO before 2023 unless the legal process is accelerated.
The only way this will occur is if the two sides settle. However, this is very unlikely because of the amount of money involved in the case. There is nothing stopping Flutter from listing FanDuel, but the company wants to find investors to fund the project.
This is proving difficult amid the legal battles occurring between the two parties.