An arbitration board has ruled in favor of Flutter Entertainment in a valuation conflict involving FanDuel, concluding that Fox Corporation’s assessment lacked foundation. The board upheld Flutter’s stance that FanDuel held a \$20 billion value in 2020, a figure derived from a market evaluation performed in December of that year when Flutter augmented its ownership in the company.
This judgment carries substantial ramifications for Fox, which possessed an option to purchase an 18.6% share in FanDuel. The arbitration board determined that the purchase price for Fox to execute this option should be computed based on the \$20 billion valuation. Factoring in a 5% yearly compounded growth until the option’s expiration in December 2030, Fox would be required to pay roughly \$4.1 billion to secure the stake.
This disagreement originated in April 2021 when Fox commenced arbitration proceedings, alleging a discrepancy regarding the option terms. Flutter asserts it has operated with integrity throughout, rejecting Fox’s supplementary claims, including the assertion that Flutter neglected to sufficiently back the operations of Fox Bet. The arbitration board ultimately rejected these assertions, ruling in Flutter’s favor.
A significant discussion is underway regarding the possibility of Fox Corporation entering the race for FanDuel’s prospective initial public offering – we’re discussing the entity that holds ownership of Flutter Entertainment, FanDuel’s parent company. The situation has become complicated, with disagreements arising over whether Fox possesses the right to engage and what conditions might be imposed. Flutter has been unambiguous: an IPO is not occurring until an arbitration panel resolves the outstanding matters or both sides surrender and reach a compromise.
Rumors suggest that a determination from the arbitrators will be announced in the early months of 2024.
Flutter’s Chief Executive Officer, Peter Jackson, spoke frankly: “This judgment today supports our stance and establishes a valuation for the enterprise should Fox desire to acquire a stake.” His confidence is evident.
He continued by commending FanDuel, stating, “They are controlling the American marketplace with their exceptional offerings and capacity to draw in consumers – they are undeniably the frontrunner.”
And for all the FanDuel enthusiasts, Jackson remarked, “The squad is entirely concentrated on maintaining its competitive edge, and we are eager to divulge our advancements at the U.S. Capital Markets Day on November 16th.”