TIDMPAP TIDMBET
RNS Number : 0818X
Paddy Power plc
26 August 2015
26 August 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION
THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO
MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND
MERGERS (THE "CODE") OR RULE 2.5 OF THE IRISH TAKEOVER RULES AND
THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE.
FOR IMMEDIATE RELEASE
Paddy Power plc and Betfair Group plc
Possible Merger of Paddy Power plc ("Paddy Power") and
Betfair Group plc ("Betfair") (the "Possible Merger")
The Boards of Paddy Power and Betfair are pleased to announce
that they have reached an agreement in principle on the key terms
of a Possible Merger of Paddy Power and Betfair to create Paddy
Power Betfair plc (the "Combined Group").
The Possible Merger would create one of the world's largest
public online betting and gaming companies by revenue with enlarged
scale, capability and distinctive and complementary brands. The
combination has compelling strategic logic and represents an
attractive opportunity for both companies to enhance their position
in online betting and gaming and to deliver synergies, customer
benefits and shareholder value.
Key Terms
n Paddy Power shareholders would own 52 per cent. and Betfair
shareholders would own 48 per cent. of the issued and to be issued
share capital of the Combined Group;
n Immediately prior to completion, Paddy Power shareholders
would receive a special dividend of EUR80 million;
n Gary McGann, Chairman of Paddy Power, would become Chairman of
the Board of the Combined Group;
n Breon Corcoran, CEO of Betfair, would become CEO of the
Combined Group. Andy McCue, CEO of Paddy Power would become COO and
an Executive Director of the Combined Group. Alex Gersh, CFO of
Betfair, would become CFO and an Executive Director of the Combined
Group;
n The Board of Directors of the Combined Group would also
comprise other non-executive directors nominated equally from each
of Paddy Power and Betfair; and
n The structure of the Possible Merger is being finalised with a
view to maximising benefits to shareholders and other stakeholders,
and it is expected that the Combined Group will maintain a
significant presence in Ireland and in the UK.
Compelling Strategic Rationale
n Creation of one of the world's largest public online betting
and gaming companies with revenues of over GBP1.1 billion (EUR1.5
billion(1) ) in their last financial years;
n The Combined Group's scale and capabilities would leave it
better placed to compete in existing and new markets;
n Dual brand strategy in Europe utilising the distinctive and
complementary brands of Betfair and Paddy Power;
n Complementary online business and geographic mix;
n Diversified group with strong platforms across online and
retail in the UK and Ireland, and attractive international growth
opportunities in Continental Europe, the US and Australia; and
n Cost and revenue synergies from efficiencies which reflect the
complementary nature of the businesses and through leveraging of
the Combined Group's enlarged scale.
_________________________________
(1) Based on GBP/EUR exchange rate of 0.7378
Next Steps
Discussions remain ongoing regarding the other terms of the
Possible Merger. The terms of the Possible Merger remain
conditional on, inter alia, completion of due diligence and the
parties reserve the right to waive these conditions and, with the
agreement of the other party, to vary the form of consideration
and/or make an offer on different terms. While there can be no
certainty that any transaction will occur, Paddy Power and Betfair
expect to provide a further update over the coming weeks.
The structure of the Possible Merger remains under
consideration. Accordingly until further notice, both the Code and
the Irish Takeover Rules apply including the disclosure rules under
Rule 8 of the Code and Rule 8 of the Irish Takeover Rules. For the
purposes of the Code, Paddy Power is the offeror and Betfair is the
offeree. For the purposes of the Irish Takeover Rules, Betfair is
the offeror and Paddy Power is the offeree.
In accordance with Rule 2.6(a) of the Code, Paddy Power has
until 5.00pm on 23 September 2015 (or such later time and/or date
to which this date may be extended by the UK Takeover Panel in
accordance with Rule 2.6(c) of the Code and Note 1 on Rule 2.6) to
announce either a firm intention to make an offer for Betfair in
accordance with Rule 2.7 of the Code or announce that it does not
intend to make an offer, in which case the announcement will be
treated as a statement to which Rule 2.8 of the Code applies. If
the Possible Merger is structured with Betfair as the offeror, this
deadline will not apply.
This announcement has been made with the consent of Paddy Power
and Betfair.
Enquiries
Paddy Power plc
Cormac McCarthy +353 (0) 1905 1013
Morgan Stanley (Financial adviser to Paddy Power)
Colm Donlon +44 (0) 20 7425 8000
Laurence Hopkins
David Kitterick
IBI Corporate Finance (Financial adviser to Paddy Power)
Tom Godfrey +353 (0) 7 6623 4800
Ger Heffernan
Laurence O'Shaughnessy
Betfair Group plc
Paul Rushton, Investor Relations +44 (0) 20 8834 6139
James Midmer, Corporate Communications +44 (0) 20 8834 6843
Goldman Sachs International (Financial adviser to Betfair)
Anthony Gutman +44 (0) 20 7774 1000
Nick Harper
Stephen Little
A copy of this announcement will be available at both
www.paddypowerplc.com and http://corporate.betfair.com. The content
of the websites referred to in this announcement are not
incorporated into and do not form part of this announcement.
The directors of Paddy Power accept responsibility for the
information contained in this announcement relating to Paddy Power,
the Paddy Power Group, the directors of Paddy Power and members of
their immediate families, related trusts and persons connected with
them. To the best of the knowledge and belief of the directors of
Paddy Power (who have taken all reasonable care to ensure that such
is the case) the information contained in this announcement is in
accordance with the facts and does not omit anything likely to
affect the import of such information.
The directors of Betfair accept responsibility for the
information contained in this announcement relating to Betfair, the
Betfair Group, the directors of Betfair and members of their
immediate families, related trusts and persons connected with them.
To the best of the knowledge and belief of the directors of Betfair
(who have taken all reasonable care to ensure that such is the
case) the information contained in this announcement is in
accordance with the facts and does not omit anything likely to
affect the import of such information.
The release, publication or distribution of this announcement in
or into certain jurisdictions may be restricted by the laws of
those jurisdictions. Accordingly, copies of this announcement and
all other announcements relating to the combination are not being,
and must not be, released, published, mailed or otherwise
forwarded, distributed or sent in, into or from any restricted
jurisdiction. Persons receiving such announcements (including,
without limitation, nominees, trustees and custodians) should
observe these restrictions. Failure to do so may constitute a
violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies involved
in the combination disclaim any responsibility or liability for the
violations of any such restrictions by any person.
Morgan Stanley & Co. International plc ("Morgan Stanley")
which is authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the UK is acting as financial adviser to
Paddy Power and no one else in connection with the Possible Merger.
In connection with such matters, Morgan Stanley, its affiliates and
their respective directors, officers, employees and agents will not
regard any other person as their client, nor will they be
responsible to any other person for providing the protections
afforded to their clients or for providing advice in relation to
the Possible Merger, the contents of this announcement or any other
matter referred to herein.
IBI Corporate Finance Limited, which is regulated in Ireland by
the Central Bank of Ireland, is acting exclusively for Paddy Power
and for no one else in connection with the Possible Merger and will
not be responsible to anyone other than Paddy Power for providing
the protections afforded to customers of IBI Corporate Finance
Limited or for providing advice in relation to the Possible Merger,
the contents of this announcement or any transaction or arrangement
referred to herein.
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the
United Kingdom, is acting exclusively for Betfair and no one else
in connection with the matters referred to in this announcement and
will not be responsible to anyone other than Betfair for providing
the protections afforded to clients of Goldman Sachs International,
or for providing advice in connection with the matters referred to
in this announcement.
Rule 2.10
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