# Flutter Entertainment strikes $4.2 billion deal to control most of FanDuel

Fastball Holdings is a consortium of CapitalG
GOOG,
-0.21%,
Comcast Ventures
CMCSA,
-1.02%,
KKR
KKR,
-0.45%,
Verizon Ventures
VZ,
+0.41%,
NBC Sports Group, and Shamrock. Fastball will hold 7% of Flutter after the deal completes.

Flutter said the deal will expose it further to the “most attractive opportunity” in the sector today,

Flutter’s shares shot up as much as 14% in London after the deal was announced, to lead the FTSE 100
UKX,
+0.05%.

By the end of 2021, Flutter expects its online sports betting products to be available in states accounting for one-third of the U.S. population.

The deal implies an enterprise value for FanDuel, a rival to DraftKings
DKNG,
+5.41%,
of $11.2 billion. Flutter said that is a 40% discount to DraftKing’s valuation, which it said was because of Fastball’s “minority position in FanDuel, the provision of price certainty and liquidity to Fastball as well as allowing it to expedite the payment it receives for its full stake.”

A complicated structure would have involved fair market valuations being conducted for FanDuel in 2021 and 2023. “The board has concluded that it is in the best interest of Flutter shareholders to avail of the discount factors through this alternative transaction now and thus remove pricing uncertainty in acquiring Fastball’s stake in FanDuel,” the company said.

The deal also eliminates an option for Fastball to get a payment based on the valuation of Fox Bet.

Fox Corp.
FOX,
-1.74%
said it would participate in the equity offering by Flutter.

“Maintaining our ownership stake in Flutter signifies our long-term commitment to Flutter, and ongoing confidence in management’s ability to execute against the fast growing U.S. opportunity. Fox’s audiences have proven to be highly engaged with free to play and wagering content, and we are excited to offer them access to products from Flutter’s market leading stable of U.S. brands,” said Fox Chief Executive Lachlan Murdoch.

Fox and News Corp, the publisher of MarketWatch, share similar ownership.

Boyd Gaming Corporation
BYD,
+0.55%
will still hold 5% of FanDuel.