Online Gambling Giant Betfair Ready to Take the IPO Plunge

Published Monday, September 13, 2010 -

Betfair was reportedly valued at £1.5bn in 2006 after Japan’s SoftBank bought a 23 per cent stake in the company for £355m. Back in February of 2010 the company chilled rumours of an Initial Public Offering in the wake of other large companies not doing so well with their floatation. 
What with weak demand, volatile economic conditions and a lack of confidence in the commodities markets firms such as the Scottish Resources Group, Fairfield Energy, and online grocery firm Ocado all withdrew their offerings because of less than stellar performances in sales.

Betfair the world’s largest online betting exchange is expected to finally launch a highly anticipated initial public offering, yet few of the details have been settled to date.
The speculation that Betfair would make the move to an IPO has been circulating for many years in the market. As far back as 2006 the company was supposedly going to make an offering but that ended in chief executive officer Stephen Hill leaving his position in protest.
Morgan Stanley, and Goldman Sachs have been appointed financial advisers to Betfair along with legal firm Freshfields Bruckhaus Deringer weighing in with advise on Betfair's possible IPO.

Betfair’s management, including chief executive David Yu, and staff with a number of private equity investors own a large portion of the company’s equity. The original founders of Betfair, Andrew Black and former trader Ed Wray, who launched the firm 11 years ago still own a combined 24% of Betfair.
The Sunday Times newspaper suggests that the company will announce it's decision to float within a few weeks which could see the firm gain a position on the stock exchange and the founders become the greatest beneficiaries of the move.
Betfair has been doing well in recent years with a revenue growth in 2009 of  27 per cent to £303m, while it generated before tax profits of £42.4m, marking an increase on 2008 when profits were £38m.
The company has a substantial presence in Australia and last year bought TVG, an American channel that televises horse races.



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