Paddy Power and Betfair merger company to be Dublin based
The €2 billion-a-year gambling giant formed by the merger of Irish bookie Paddy Power and London-listed betting exchange Betfair will be based in the Republic.
The companies announced last month that they planed to merge to create one of the world’s biggest gambling groups, with annual revenues between €1.5 billion and €2 billion and a stock market value of €8 billion at yesterday’s closing prices.
An update on the deal’s progress yesterday said the business will be “headquartered in Dublin and is expected to maintain a significant presence in both Ireland and the United Kingdom”. When they announced details of the merger last month, neither company was able to say where the new entity, which will be known as Paddy Power Betfair plc, would be based.
Paddy Power chief executive Andy McCue and chief financial officer Cormac McCarthy pointed out that the advantages of the two jurisdictions’ tax and betting regulation regimes would be weighed when making a final decision.
Both acknowledged the Irish 12.5 per cent tax on company profits was attractive, but they also indicated the UK’s long-established system for regulating gambling, something the Republic has yet to introduce, gave it an edge in that sphere.
Paddy Power Betfair will have its main listing on the London Stock Exchange, which has already indicated it will allocate it a “UK nationality”, making the new company eligible for inclusion in one of the FTSE All-share, 250 or 100 indices. The group will have a secondary listing on the Irish market.
According to yesterday’s statement, the deal will cut the merged entity’s costs by £50 million (€69 million) annually. However, the full impact of this will not be felt until the third year after a transaction is completed, as the companies say they plan to deliver those savings progressively.
Betfair’s investors will receive 0.4254 new shares in Paddy Power for each of one of their Betfair shares.
