CVC ends pursuit of Betfair

Private equity firm CVC Capital Partners has ended a £1 billion (€1.17 billion) attempt to buy online betting exchange Betfair after the two companies failed to agree on price and strategy.

Betfair shares fell 3.5 per cent to 864 pence after the company said it had rejected an improved 950 pence a share bid proposal from CVC, the largest shareholder in Formula One motor racing.

The Betfair board had reportedly been seeking more than £10 per share. Without elaborating, the company, whose shares debuted in 2010 at £13, said attempts to negotiate a higher bid, after it rejected the proposal made on Sunday, foundered over strategy.

The failure of talks that began last month will increase pressure on recently installed Betfair chief executive Breon Corcoran to deliver on a plan to cut costs and pull back from markets such as Greece and Germany where regulatory risk is too high or tax rates are punitive.

"In our view, CVC were stretching the realms of realistically making a significant return on investment at the top level," said analyst James Hollins of Investec, referring to the private equity firm's improved takeover proposal.

“This leaves Betfair as a listed entity undertaking a turnaround (cost-cutting, product development) in the public glare,” he added. – (Reuters)