Potential Bidder for Bet365 Arises in Sparse Market: DraftKings
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Published on: May 5, 2025, 03:32h.
Last Updated on: May 5, 2025, 03:32h.
Todd Shriber @etfgodfatherRead MoreFinancialGaming BusinessMergers and Acquisitions Rumors swirl about Bet365's possible sale or IPO – but who might be interested?*
- Bet365: Positioning for sale or IPO, but buyers are scarce
- Private equity firms may be the best option
The rumor mill is buzzing with speculation that Bet365 is mulling over a significant move, such as a sale or initial public offering (IPO), but the pool of viable buyers reportedly isn't deep. Among the gaming firms, only DraftKings (NASDAQ: DKNG) appears to be a potential candidate.
To clarify, neither Bet365 nor DraftKings has issued a statement about these rumors, and it's unclear if the two companies have had any conversations. According to reports, the Coates family, which controls Bet365, has been discussing various possibilities for the UK-based sportsbook giant with Wall Street banks. These prospects range from a sale, providing the family a way to cash in on their shares, to selling some of their New York shares.
According to The Sunday Times, other UK betting firms like Entain and FanDuel parent Flutter Entertainment (NYSE: FLUT) are unlikely to place bids for Bet365 due to antitrust concerns and significant overlap in their European operations. This leaves DraftKings as the most probable gaming industry suitor for Bet365, based on The Times' report.
DraftKings: Ready to Pounce?
If Bet365 were to sell itself outright, CEO Denise Coates would allegedly prefer a $12 billion valuation. As DraftKings has a market capitalization of $17.12 billion as of today's US market closure, the Boston-based company has the resources to acquire Bet365, but it would likely offer shares mainly with a minimal cash component.
In such a transaction, Coates and her family could become significant DraftKings shareholders. However, it's worth noting that insiders at DraftKings are frequent sellers, and the stock has dropped 18.52% over the past year.
DraftKings has some precedent for acquiring a UK company, as in 2021, the operator proposed a $22.4 billion cash and equity deal for Entain, though some analysts believe this move was intended to boost Entain's price to prevent MGM Resorts International (NYSE: MGM) from acquiring majority control of BetMGM.
Private Equity Firms: Attractive Suitors for Bet365
As Casino.org recently reported, given their expertise in the gaming industry, private equity firms like Apollo Global Management, CVC Capital, and Blackstone might make ideal suitors for Bet365. None of these three firms have publicly expressed an interest in buying the gaming company as of yet.
Private equity firms have stronger financial resources for large transactions and can offer the Coates family more cash upfront than DraftKings. Additionally, they could purchase Bet365 outright or a part of it, while preparing for a US listing that would further enrich Coates and her family.
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Private Equity Firms as Buyers: The Big Picture
No specific private equity firms have been identified as potential suitors for Bet365 yet, but their potential advantages make them appealing to the Coates family:
- Valuation Flexibility and Partial Sale Options: Private equity deals can allow Coates' family to retain a sizable stake while releasing capital and preparing for a future IPO.
- Access to Deep Capital: Leading private equity firms can provide large sums and offer favorable terms for U.S. market expansion or refinancing.
- Strategic Alignment: Private equity ownership offers flexibility for strategic changes without immediate public scrutiny.
- Competitive Advantage: A sale to a rival like DraftKings might face regulatory and antitrust scrutiny, making a financial partner more attractive.
- IPO Preparation: Private equity ownership can position Bet365 for a smoother and more lucrative eventual IPO, creating new value for the Coates family and investors.
In summary, while no specific private equity firms have been named yet, their structure, flexibility, and strategic benefits make them more appealing to Bet365’s owners compared to a sale to a direct competitor like DraftKings.
- Financial rumors have circulated about the potential sale or IPO of Bet365, a significant player in the sports betting industry.
- Despite speculation, the pool of viable buyers appears limited, with DraftKings being the most apparent gaming firm considering a deal.
- Given Bet365's ties to the UK sports industry, other UK betting giants like Entain and Flutter Entertainment might avoid bidding due to antitrust concerns and European operations overlaps.
- Private equity firms, such as Apollo Global Management, CVC Capital, and Blackstone, may emerge as attractive suitors for Bet365 due to their expertise, financial resources, and ability to offer a strategic advantage and potential IPO preparation for the Coates family.