Paddy Power shareholders have approved the acquisition of the remaining minority stake in Sportsbet, which will give the company full control of the Australian bookmaker.
In May 2009 Paddy Power acquired 51 per cent of Sportsbet, and in February last year it increased this stake to 60.8 per cent. In December, the Irish-listed bookmaker announced its intention to buy up the outstanding 39.2 per cent stake for a consideration of Aus$132.6 million. At an extraordinary general meeting in Dublin’s Burlington Hotel this morning, Paddy Power shareholders voted in favour of this move.
The deal also includes a clause whereby Paddy Paddy will make an additional payment of up to Aus$25 million if Sportsbet’s Ebitda (earnings before interest, taxes, depreciation and amortisation) exceeds Aus$80 million.
Chief executive Patrick Kennedy said the rationale for the deal is both strategic and financial. The acquisition will be earnings enhancing from the start, he told shareholders. Furthermore, taking full control of Sportsbet will increase Paddy Power’s exposure to the fast-growing Australian online market and to one of the top performing developed economies. Paddy Power can now invest further in Sportsbet and drive its development, he said.