City awaits CVC Betfair bid, or not
CVC, the private equity group that was revealed as in talks with Betfair about a possible bid, has until 5pm today to put in a bid or walk away.
The city is talking up a bid of £10, or somewhere near that, to get discussions really going. Betfair shares have responded in kind to this potential. But it’s really a case of how much risk CVC wants to take.
At certain prices Betfair would be a slam dunk investment. I bought into Betfair shares when the bottomed but there is a danger that Betfair’s business is in danger of getting stuck in the middle. With the focus on the sportsbooks, which is not core business and not their USP, the exchange appears to be suffering. I’ve sold my holding into the market and will take the money and run, well watch from a distance anyhow. So I may lose out on a bit of upside, but I’ve banked a hefty profit anyhow.
I’ve laid out a few times how I think Betfair could really exploit underlying talent in both sports book and exchange, but the current management appears to be keen to confuse Mr General public. I’m not sure that’s wise, but it’s difficult to tell without any full disclosure of what’s going on in the underlying business. We will have to wait a bit for that.
Mark Davis has the inside view on this on his blog, where he suggests further upside.
Still, I’ll await details of the bid or lack of it later today.
Category: Betfair
