Rupert Murdoch’s Fox sues Flutter Entertainment over FanDuel stake
Flutter Entertainment PLC (LON:FLTR), the owner of bookmakers Betfair and Paddy Power, has been sued by Rupert Murdoch’s Fox Corporation (NASDAQ:FOXA) over the ownership of US gaming business FanDuel.
Fox filed a lawsuit against the FTSE 100 company overnight to secure an option to buy into FanDuel at the same price Flutter paid back in December rather than the higher price Flutter believes the business is worth today.
The Murdochs are looking to snap up an 18.6% stake in FanDuel based on its valuation of US$11.2bn when Flutter acquired its 37.2% stake.
Dublin-headquartered Flutter says Fox’s legal filing “is without merit” and so it will “vigorously defend its position” in the arbitration process.
The price of Fox’s option could be determined by an initial public offering (IPO) for FanDuel, which the company said last month it is considering.
Flutter argues that Fox must pay “fair market value” to exercise the option in July, saying that buying at December’s valuation “would represent a windfall to Fox compared to the fair market valuation as of July 2021, to which the parties had previously agreed”.
But if there is no IPO by July, then investment banks will be consulted to determine fair value, which seems likely to be higher than rival the US$25bn debut market cap for FanDuel’s smaller rival DraftKings Inc (NASDAQ:DKNG), which has since neared a market valuation US$29bn.