The Stars Group Sells $622 Million in Stock to Finance Sky Bet Acquisition

June 29th, 2018 by CardsChat News

The parent company of biggest poker site in the world continues to shore up its available cash needed to complete the purchase of one of Britain’s top sports betting operations for nearly $5 billion.

The Stars Group

The Stars Group now has extra cash on hand to complete the purchase of Sky Bet. (Source: Valley Games)

The Stars Group, which owns both PokerStars and FullTilt, recently announced the completion of a successful public share offering. With the sale of some 25 million common shares, valued at $38 per share, it was able to raise a total of $622 million, after factoring for underwriting discounts and commissions.

According to an official release from the group, the underwriters for the offering were Morgan Stanley, J.P. Morgan, and Deutsche Bank Securities. 

The Canadian company trades on the Toronto Stock Exchange (TSX), and the shares were offered up to citizens people living in the provinces and territories of of that country.

Sky’s the Limit

With more cash on hand, The Stars Group is now in a position to complete the purchase of British bookmaker Sky Bet, which is currently owned by CVC Capital Partners and UK broadcaster Sky Plc.

The acquisition was announced back in April for an estimated price of $4.7 billion, although the official purchase has yet to go through. The corporation says it will use the influx of fresh cash, “together with debt financing and cash on hand” to complete the sale. 

The Stars Group certainly isn’t buying low at that sticker price, and it will be hard pressed to ever get the type of return on investment that current owners are set to see. CVC Capital Partners bought an 80 percent controlling interest in the company from Sky Plc in 2014 for $1.1 billion dollars. If this latest sale closes at the reported price of $4.7 billion, it’ll mark a multi-billion dollar profit that will be hard to match.

Once the deal is complete, CVC intends to reduce its controlling interest in Sky Bet to 12 percent.

Meanwhile, the Stars Group says that, if for some reason the sale doesn’t go through, they’ll use their newfound cash for “general corporate purposes”.

Betting on Sports Betting

The Stars Group, which was originally called Amaya Inc., is making it clear that it’s not just about poker anymore. In addition to making a significant splash by trying to buy Sky Bet, the company also acquired CrownBet Online earlier this year. The Australian-based sports book sold a 62 percent stake to The Stars Group in February for a price of $117.7 million.

The acquisitions put the company in a position to take advantage of the fast-changing sports betting landscape in the US, now that the Supreme Court has allowed states to create their own regulations around sports wagering.

According to The Financial Post, poker accounted for just two-thirds of The Stars Group’s revenues in 2017.

With the the new market just beginning to open up, expect to see Stars making a bigger splash on the sports betting scene in the months ahead.

6 Responses to “The Stars Group Sells $622 Million in Stock to Finance Sky Bet Acquisition”

  1. king11682 says:

    Stars group besides making money with poker, it expands as a company, by buying sky bet shares to have a great impact in the sports betting scene
    and thus obtain great profits with this new business.

  2. Ivansito26 says:

    like any good businessman wants to expand and close many betting sites and consolidate as one of the best online betting companies in the world. and more that you have the best poker room …

  3. Andrew Popov says:

    The company earned 622 million dollars – not a few thousand to save the school league … Probably, this is how millions are earned?

  4. guicor30 says:

    Good for The Stars Group for the intention of acquiring Sky Bet; but it seems to me that paying $ 4.7 billion when Sky Bet was acquired for little more than $ million, is a profit of 3 billion; I think they have to evaluate that purchase well to avoid possible falls in online poker games.
    Or maybe what they really want is to promote the brand of the group and focus on the betting and casino site?

  5. es530 says:

    Well, looking at it without much depth, it seems to me that this group knows what it wants. Sports betting is a good way.
      but I think they could move to regulate poker in the world – since it is the biggest site.

  6. DiegoRamos says:

    Another gigantic acquisition of the group stars.
    I believe that soon there will be another great negotiation.

    But that makes me think that an era of monopoly may be coming. We see absurd rakes, and micro players not being benefited by rewards plans.

    Are these deals really good for players and bettors?

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