Report: Bet365 considering sale
Gambling behemoth Bet365 is mulling the sale of the business for a potential windfall of £9 billion for the Coates family.
This is according to a report by The Guardian, which stated there have been internal informal talks weighing the options for a sale, IPO or partial sale of the company. The company has reportedly been valued at £9 billion.
According to the report, Bet365, led by Denise Coates, has conducted talks with US advisers and Wall Street banks over the last few weeks.
One option being considered is the partial sale of Bet365 to a private equity firm. That type of deal would allow the Coates family to retain a stake in the family business.
Another option being floated is a listing on the US stock market. iGB has contacted Bet365 for comment on the report.
Bet365 exits China
Some recent Bet365 activity has hinted at a potential sale or IPO, including the operator exiting the Chinese sports betting market in March and a pivot to regulated markets like the US and Brazil.
Gambling in the People’s Republic is strictly prohibited, with the exception of two special administrative regions (SARs): Macau and Hong Kong.
Bet365’s operation in the market had faced scrutiny, but it repeatedly denied breaking Chinese law.
In 2020, a Bet365 representative told the Telegraph: “There is no legislation which expressly prohibits the supply of remote gambling by offshore operators into China. In the view of Bet365 and its lawyers, Chinese law does not extend to the provision of services into China by offshore gambling operators.”
H2 Gambling Capital Managing Director Ed Birkin has told iGB that there are indicators that the group is moving towards something. He noted that if the speculation of Bet365 sale had occurred 12 months ago, then it might have been a shock, but recent actions by the group have brought M&A considerations to the forefront.
“When they announced they’re getting out of China, that seemed as though they were just tidying up shop completely for something to happen,” Birkin said.
“So, because of that, it’s not a shock. I think if it’s just the China exit on its own, then we could have thought that maybe it was more of a regulatory pressure, but with the football club combined, I think it’s kind of hinted to this.”
Return to profit
A January Companies House filing outlining Bet365’s most recent earnings, for the 12 months to 31 March 2024, reported group revenue of £3.72 billion ($4.65 billion). This marked a 9% increase on the operator’s 2022-23 revenue of £3.41 billion.
The operator returned to profit during the period, after reporting a £12.4 million loss in 2023. Profit before tax for the betting and gaming segment was £626.6 million.
A Regulus Partners note on the numbers said several factors could be impacting Bet365’s growth plans.
These included competitor in-play product offerings catching up to Bet365’s and a decline of VIP and grey market takings in mature EU markets.
“Bet365 has run out of in-play growth and has not yet found a similar growth engine for a world in which in-play betting is a relatively mature commodity. Consequently, Bet365 is losing market share dangerously rapidly,” Regulus Partners said at the time.
More to follow….