Betfair to float

I`m sure there were no plans to float in the Q and A the other night.

http://blogs.news.sky.com/kleinman/Post:b0eeb22e-54df-4558-bde9-7b60fc3e80d3

Oh, joy.  More money invested in arcade games.......

Betfair, the online betting exchange, is targeting an autumn stock market listing valuing the company at about £1.5bn, I have learned.

I understand that Betfair held detailed talks earlier this week with its advisers at Goldman Sachs and Morgan Stanley about a plan that would see the company catapulted straight into the FTSE 250 as early as September.

It would be a landmark moment for a company dubbed ‘Britain’s secret Google’ and which was founded just 11 years ago. And it would provide a platform for Betfair to lead the consolidation of the online gaming market.

As I understand it, Betfair’s shareholders will not formally decide to press ahead with the flotation until after the summer break. It will undoubtedly take into account the performance of other IPO candidates, one of which – Fairfield Energy – cancelled its listing this week, before taking a final decision.

One person close to the betting exchange told me today that Betfair was “95 per cent certain” to announce an IPO in September. A flotation would give the company access to capital to accelerate its expansion, both internationally and by moving into other areas that use similar exchange technology.
In one sense, as a tech company with no obvious listed peers, Betfair could be compared to another business experiencing a rather torrid ride as it prepares to go public: the online grocer Ocado.

The similarities between Betfair and Ocado are merely superficial, however. For one thing, Betfair recorded earnings (before interest, tax, depreciation and amortisation) in the year to April 30 2009 of just over £70m. That was on sales of about £300m – a very healthy margin indeed. Ocado, by contrast, has yet to make any money.

I’m told that Betfair, which abandoned an attempt to float in 2005, would be unlikely to use its listing to raise new money by issuing new shares but that some of the existing investors would seek to reduce their shareholdings.

Four blocs of shareholders each own about a quarter of the company, comprising: Ed Wray and Andrew Black, Betfair’s founders; Softbank, the Japanese bank; a group of venture capital investors including Balderton Capital; and company employees.

Betfair declined to comment.

http://blogs.news.sky.com/kleinman/Post:b0eeb22e-54df-4558-bde9-7b60fc3e80d3

I’m told that Betfair, which abandoned an attempt to float in 2005, would be unlikely to use its listing to raise new money by issuing new shares but that some of the existing investors would seek to reduce their shareholdings.

Floating before they sink?

Betfair Live Chat Joined: 07 Jun 00
Replies: 40 13 Jul 10 19:03   

We’re certainly trying to run the business well and keep it growing and successful but have no immediate plans to float.

Those live chats are a waste of time as we've seen previously! YTS employees with standard answers wrote out for them.

Personally I reckon Betfair themselves behind these rumours.

I mean think about it, bung some banker / city trader a few k to start a rumour & an off the record press leak { and they know a lot of bankers } , and all of a sudden every one is talking about Betfair again.  Free publicity galore. 

bung some banker / city trader a few k to start a rumour

k would have to be m to get those ponces involved. The last time they thought about floating they paid a financial parasite a couple of million just to walk into their offices and fart.

i think 100% betfair will list..owners need to get some of there money out that tried up in betfair for all those years, stocket market listing is the only way today

Will float this year to the tune of 1.5 billion!

we have no plans to float
we have no plans to raise vat
I have no plans to get laid

So what differences do we think this will make to the actual site and the people who use it?

It would be a landmark moment for a company dubbed ‘Britain’s secret Google'

ROFPML. If betfair ran google the result of your search would arrive by second class post unless you used your own search algorithm or bought one off a third party. We're talking about an outfit that, in 10 years, have been unable to get the browser back button to carry out the default functionality on their forum. An outfit that reserves 99% of its processing for a group of people who contribute no real (non-cheating) liquidity (strangely they charge this group less than everyone else and they, even more strangely, respond by bitching non stop about it). The success of microsoft does suggest that lack of innovation needn't prevent world domination but microsoft at least knew how to plagiarise the ideas of others. I can only think the article misspelt Dougal.

Ill be having a few shares for deffo, not going overboard but on the basis that Im an honest individual with reasonable success who has to pay premium tax then its like paying myself then

With regard how betfair change after the float....They have started to become and will continue to be ruthless in maximizing profit and if they step too far then theres the safety net of the other exchanges there to learn by the mistakes imo

" The last time they thought about floating they paid a financial parasite a couple of million just to walk into their offices and fart."

Are you still counting your money feck?

another thread hijacked by the whinging cnut, start a blog feck ffs

strangely they charge this group less than everyone else and they, even more strangely, respond by bitching non stop about it

dlarssonf belongs to this group and is also a financial sector parasite (NAP).

you have no idea, you are just a horrible despicable whinging cnut

You sound tough arsonfire. Bet you're one of those pin striped w@nks that does cage fighting.

no not tough at all, can't understand how some1 can whinge and moan and complain about the echange yet here you are everyday.  I wouldn't mind if you started threads to this effect because when I see your name as the thread starter I skip them.  But when there is a discussion going on , you start with your same old whinge and bang end of thread.

a horrible whinging prick is actually being kind to you

If Betfair didn't/no longer existed the sad sack feck would be bereft; he'd have to toddle off to Money Saving Expert so he can read his own comments. He's more to be pitied than pilloried.

Fk me, there's two of them.

I made two posts, both relative to the thread, prior to you two would be city boys sticking your oars in and hijacking the thread. What's up with you ladies anyway? Were you unable to close out a £2 trade or something.

"The group, founded 11 years ago, is understood to be seeking to float chiefly to provide an exit route for some of its existing shareholders." FT.com

Not exactly encouraging, given the threats that may lie ahead.

Come on Betfair lets have some positive spin to help those existing shareholders.

That's the way I see it hazel. Unfortunately I think they're finding that few, if any, countries are going to stand idly by while they waltz in and decimate their income from gambling and put their horse racing industries under threat. They'd have been strangled at birth in this country as well had their timing not coincided with the offshore exodus of bookmakers. Interbet, who were really the first internet based exchange, were hounded out of the country by the customs and excise.

And they're not going to achieve world domination from Antigua.

I think you might need a woman feck (or maybe a man)

The inherent bitterness and jealousy seeps from every pore dont it?

No thanks dusty but I wish you well in your quest.

amazing why horse racing has been protected for so long and the big 3 allowed to fleece away mug money......market forces will take effect sooner or later!

if they do try to float the bad press just might follow, bent jockeys,
fast picture cheating, owners laying, the can of worms might have a affect

THEY WILL DO IT AFTER THE WORLD CUP ONE YEAR WHEN ALL THE COMMISION FROM THE WORLD CUP GAMES ARE SHOWN,

Betfair, in 11 year has never paid out any of there profit..and betfair doesn't want to pay from profit...listing is the only way for shareholder to get money from betfair :)

Profits have peaked.
Punters skinned.
Future bleak.

if they do try to float the bad press just might follow, bent jockeys,fast picture cheating, owners laying, the can of worms might have a affect

If the true extent of this is ever made public it will make expansion all the more improbable. There are already EU countries banning betfair on corruption grounds? If they can't get it together in the EU what chance have they outwith it. The only good thing that could come out of this is that betfair might finally start looking after their existing losers and maybe make them give a bit more thought to expansion in this country. Maybe they haven't got the bottle to go to war with the big bookmakers though.

They have a trusted brand name and a large, growing customer base.

so that's what the premium charge was for then. Advertising

the game was crooked long before betfair came along.....at least they have audit trails!
Expansion in exchange betting will come just a matter of time and breaking the mould.

Imo the valuation looks far too high,any gambling website is subject to future legislation that could seriousy damage future profits.

Saying that i imagine those who invested ten years ago are salivating at the prospect of lottery style returns on relatively modest sums.

I agree Zebadei their valuation is far too high....... future expansion in overseas markets may now be limited given some are looking at building their own platforms.

zebadei is right, imo.

if I had wealth tied up in betfair, I'd want to monetise it sooner rather than later for two reasons.

1 - future legislation is likely to curtail a lot of what they do.

2 - there's no inherent reason someone can't build a platform to do the same thing better/cheaper, and destroy their current de facto monopoly.

neither of those things currently seems imminent, which makes it a good time to get out.

Point 2 is not a valid point imo. It is the biggest barrier to entry for anyone entering the exchange market. BF have re-invested 100's of millions into what they have. The volume of bets/transactions that their systems have to handle is mind boggling.Just cannot be replicated cheaply.

With regard to point 1 it may well be the case that some places actually open up (US, Asia, India etc). These are just huge compared to places like France etc.

BF have re-invested 100's of millions into what they have. The volume of bets/transactions that their systems have to handle is mind boggling.Just cannot be replicated cheaply

I dont think its anywhere near 1.5 billion though. Head hunt the CTO and give them clean piece of paper and you will get massive savings over the cost of betfairs current infrastructure.

http://www.independent.co.uk/news/business/news/japanese-bank-faces-loss-on-betfair-listing-2029058.html

Softbank, a Japanese bank, is facing major losses on its 23 per cent stake in Betfair, the online betting exchange which is hoping to float in the autumn.

The British business, one of the UK’s few successes during the dotcom era, has hired Goldman Sachs and Morgan Stanley to advise on the listing, which could value the company at £1.5bn. However, that price tag is understood to be at the top of most industry watchers’ expectations. Softbank bought its near one-quarter stake in Betfair for £355m in 2006, valuing the business at £1.54bn. When asked if the company would be valued at £1.5bn, a senior Betfair source replied: “I wish.”

BF have re-invested 100's of millions into what they have. The volume of bets/transactions that their systems have to handle is mind boggling.Just cannot be replicated cheaply.

Why would anyone want to? 99% of system time is probably spent processing the requests of non liquidity providers. It's like the NHS boasting they treat more hypochondriacs than the rest of the world's hospitals treat sick people. I also suspect a lot of their liquidity is down to a very small percentage of customers. That makes them vulnerable imo.

Why would anyone want to? 99% of system time is probably spent processing the requests of non liquidity providers

you keep banging this drum but you have nothing to back it up with except your own prejudices. Take it to another thread imo

I also suspect a lot of their liquidity is down to a very small percentage of customers. That makes them vulnerable imo.

Reckon thats probably true.

It's not entirely relevant how accurate my statement is anyway. It's the interface that encourages excessive requests. Even if there were no traders, having to place maybe 20 bets to get a grand matched on a single outcome is wasteful.

you can get as much as you want matched at 1.01 i would imagine. Your talking about getting matched at price you want. Its tiring having to read same stuff on and on.

Up yours. You think I'm the only one that's ever drip fed?

nice. Everyone has trouble getting matched at value prices, your the one who thinks they have god given right to value prices and moans when you have to do some work to get on.

Yawn Feck, you don't have to be here if you don't like it but yet you moan on day after day zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

So the only people who drip feed are people with their own tissue.

I don't think I have a god given right to value prices and I don't think under any interface I'd get what I want on at my chosen price. What I moan about is the stupid interface that necessitates drip feeding and conveys information that encourages talentless copy cats to bombard the API. I'm fed up saying this. Maybe if t1ts like yourself would read my posts it would save me having to repeat the same thing over and over.

zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz...

sonoflardars, I was just wondering who the first safety-in-numbers t1t would be to come along after bren's posts.

there is no way I could even claim to be predictable with you around

nice thread hijacked

Yip, and it's the second time the stalking bore's done it on this thread.

yep by the whinging feck who hates betfair and wants an interface to just suit him

You have made 7 posts so far on this thread fondelarse. All of them are about me. None are about betfair's float.

Is it a milk float ?

softbank buying in 2005 , put a value on betfair of 1.5 billion in 2005...since then, I beleive betfair had a share buy back of about 10% of betfair shares from betfair shareholdes using there profits,,,

There's plenty of other exchanges with better technology - but they aint got any liquidity so they die. qed.

On one of the blogs someone wrote that only 10% of liquidity on here was genuine punters and rest was companies, bug traders and other big fish. Makes that Danny Bakeresque voiceover about betting against other fans seem a bit hollow possibly.

I thought they wrote this story last year.....

Betfair ponders £1.5bn flotation after shareholders call in bankers for talks
Betfair could be in line for a £1.5bn flotation after shareholders in the world's biggest gaming exchange decided to call in bankers to discuss the group's options.


By Jonathan Sibun
Published: 10:54PM BST 22 Aug 2009
Betfair ponders £1.5bn flotation after shareholders call in bankers for talks
Betfair is keen to raise capital so that it can lead the consolidation of the gaming sector

Bertie Black and Ed Wray, Betfair's founders, have agreed for meetings to be held with banking advisers over the coming weeks to discuss a potential flotation in what would be the UK's first major listing since the financial crisis hit.

Betfair is keen to raise new capital in a bid to lead the consolidation of the global gaming industry and a flotation would give it the necessary means.

A listing would also land Mr Black and Mr Wray with a potential payout worth hundreds of millions of pounds, cementing their position as some of Britain's most successful entrepreneurs.

As well as the two founders, who own a combined 25pc stake, Betfair's shareholders include SoftBank, the Japanese bank, which owns a further 23pc and is thought keen to realise a return on its investment.

Softbank bought its stake in a £355m deal in April 2006, valuing the betting company at close to £1.5bn.

While Betfair has seen strong growth since then, equity market valuations have fallen sharply since the financial
crisis hit and Softbank's stake would likely be valued at a similar level to three years ago.

Mr Wray and Mr Black are thought each to be worth about £190m but could scoop a further £350m or more between them were they to offload their stakes in the company.

Private equity investors and management own the remaining 25pc of the company.

Betfair suggested it was not pushing towards a flotation when announcing results earlier this month but the founders are understood to have reconsidered their position in the wake of the continued strength in global equity markets.

While a flotation appears to be the most likely option, Betfair could choose to raise capital by other means, including tapping existing shareholders for further funds. A downturn in the equity markets could also persuade the founders to put any flotation plans on hold.

Betfair is keen to raise capital so that it can lead the consolidation of the gaming sector.

Industry experts believe a ban on online gaming in the US could be lifted as early as next year, a move that would be expected to lead to a pick-up in mergers and takeovers in the sector. 888 and Partygaming, the online gaming companies, are thought likely to be involved in any consolidation moves.

Goldman Sachs, Morgan Stanley and Rothschild have acted for Betfair in the past and might expect to be involved in any flotation or capital raising. Any discussions are thought likely to lead to a beauty parade of potential advisers in the coming weeks.

Betfair, which revolutionised UK betting with its peer-to-peer wagers, revealed record full-year results earlier this month.

Revenues rose 27pc to £303m in the year to April 30, with active users - those who placed a bet over the period - up 25pc to 652,000. Earnings before interest, tax, depreciation and amortisation rose 29pc to £72m, despite ongoing investment.

David Yu, Betfair's chief executive, said some two billion bets were placed on the exchange last year, an average of 6.4m trades a day, more than on all European stock exchanges.

Betfair is one of a host of private companies, many backed by private equity firms, expected to float in the last quarter of this year and the first three months of 2010.

Acromas, the group behind AA, the roadside emergency service, and Saga, the travel and insurance specialist, Pets at Home, the retailer, Merlin Entertainments, the London Eye operator, and United Biscuits and Birds Eye, the food companies, are just some of those thought to be on the shortlist of possible candidates.

Betfair declined to comment.

Imagine calling in bankers for financial advice. It's like requesting a home visit from Harold Shipman when you've got a cold.

-Basic rate of commission will increase, seem to remember them toying with 7% years back.
-Accounts will be restricted or Premium Charge will go up to 50%.

£1.5bn for a retail company making £70m a year and growing (I think)means a P/E ratio of 21.  I'm no expert but I think that's not a high asking price on the face of things as a starting point.

significant potential upside as well with some big new markets potentially coming online (us, india, others)

that possibility also represents the biggest threat

Agree Zebadei & Waytowin. I personally believe it is too high. You can see the previous years profit and revenue on the reports and the valuation of £1.5 billion is over 30 times last year profit.

Sure share prices are based on future growth and if de-regulation occurs in key markets in Europe and US there is massive scope for growth but it's a gamble still.

However we've been reading these 'Betfair will float' statements for over a year and we still haven't seen anything official. They say there is no smoke without fire but they must have run out of wood for the bloody fire at this stage. Also I'd trust a more research article from Financial Times than Sky News speculation merchants.

Sorry maybe Clyde is right on the P/E, I thought it was £50m last year, too lazy to research. JOb in Sky awaits.

CLYDEBANK29     19 Jul 10 16:50 
£1.5bn for a retail company making £70m a year

Remember £70m is before depreciation, tax etc, after the figure was £34m and 2008 was £33m so not much growth there!!

Chuck in regulatory issues with countries banning BF.

I would also speculate future tax implications for users which would affect volumes,i would guess maybe 1000 users have won over £1m, its only a matter of time before a few elite users profits become more widely known and with more and more users using BF as their sole income maybe the government would like a share.

Personally ive been looking forward to them floating but the more i think about it the less i will invest.

I would also speculate future tax implications for users which would affect volumes,i would guess maybe 1000 users have won over £1m, its only a matter of time before a few elite users profits become more widely known and with more and more users using BF as their sole income maybe the government would like a share.

Betfair seem hell bent on making this happen.

Amazon is P/E 20

Betfair also has no debt, and i'm sure betfair siting on $100 million cash, as all betafir new investment has come from cash and not debt

Thats actually a high P/E rate in general but not for a tech company

Tech comps tend to be more erratic either making loads or crashing