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

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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.

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