Flutter Wins Arbitration: Fox to Pay Premium for FanDuel Stake
A panel of arbitrators favored Flutter, determining that FanDuel held a substantial worth of $20 billion, considerably exceeding Fox’s appraisal. This judgment stemmed from the equitable market rate in December 2020 when Flutter obtained a 37.2% portion of FanDuel from Fastball Holdings, suggesting an $11.2 billion value then.
Fundamentally, the arbitrators concurred with Flutter that Fox Corporation’s choice to procure an 18.6% share in FanDuel should be costed based on this $20 billion assessment. To factor in the elapsed duration, the cost will be additionally modified, employing a 5% yearly increase, until Fox opts to utilize its option, exercisable anytime before December 2030. This implies, should Fox choose to purchase in 2030, it could potentially disburse around $4.1 billion for that 18.6% stake, predicated on an estimated $22 billion valuation of FanDuel.
The complete contention originated in April 2021 when Fox commenced the arbitration, dissenting with Flutter regarding the FanDuel stake’s price. Fox asserted, among other points, that Flutter had not furnished sufficient backing for their collaborative venture, Fox Bet. Nevertheless, the arbitration panel rejected this assertion, aligning with Flutter.
A potential hurdle in the anticipated FanDuel initial public offering, a subsidiary of Flutter Entertainment, revolves around the perceived entitlements Fox Corporation asserts it possesses in the proceedings. Flutter has firmly stated that any IPO remains suspended until unresolved matters are addressed through arbitration or a mutually agreed upon resolution between the entities.
A decision from the arbitration panel is projected in the early months of 2024.
Concerning the matter, Flutter CEO Peter Jackson remarked, “The recent judgment validates our belief in our stance and provides transparency regarding Fox’s financial obligation should they choose to execute their acquisition option.”
He further commended FanDuel for its “triumph in the American market,” attributing its success to its offerings and promotional efforts, deeming it “the undisputed frontrunner.”
Jackson concluded by emphasizing Flutter’s commitment to preserving this dominance and expressed anticipation for sharing updates on their advancements with the market.