Flutter Entertainment shares fell on Wednesday after a placing and following reports that Fox Corp has filed a suit against the company related to its option to buy an 18.6% stake in US sports betting group FanDuel.
According to CNBC, Flutter – the majority owner of FanDuel – wants to buy the stake at an $11.2bn valuation, which is the value that was set when it bought a 37.2% stake from Fastball in December.
However, Flutter was understood to have argued that Fox must pay “fair market value” to exercise the option in July. That price could be determined by a FanDuel initial public offering, which Flutter is considering, CNBC said.
A Fox spokesperson confirmed to CNBC on Tuesday that it had filed the suit last week to New York’s Judicial Arbitration and Mediation Services (JAMS).
“Fox Corporation has filed suit against Flutter to enforce its rights to acquire an 18.6% ownership interest in FanDuel Group – an American sports betting brand – for the same price that Flutter paid for that interest in December 2020,” the spokesperson said.
Traders also said the stock was under pressure after around 2.3m shares in the company were placed at £153 each. The placing was linked to Fastball, with Goldman Sachs acting as bookrunner.
At 0820 BST, the shares were down 2.6% at 15,330p.
