The board of directors for both firms are engaged in discussions, with the potential new company having revenues in excess of €1.5 billion annually. Paddy Power has until September 23rd to formally make an offer.
Details of the possible merger are:
Paddy Power shareholders would own 52 percent and Betfair shareholders 48 percent of the issued and to be issued share capital of the Combined Group;
Immediately prior to completion, Paddy Power shareholders would receive a special dividend of Euro 80 million;
Gary McGann, Chairman of Paddy Power, would become Chairman of the Board of the Combined Group;
Breon Corcoran, CEO of Betfair, would become CEO of the Combined Group. Andy McCue, CEO of Paddy Power would become COO and an Executive Director of the Combined Group. Alex Gersh, CFO of Betfair, would become CFO and an Executive Director of the Combined Group;
The Board of Directors of the Combined Group would also comprise other non-executive directors nominated equally from each of Paddy Power and Betfair.
The proposed merger would provide greater scale and capability leaving the company better placed to compete in existing and new markets.
The combined group would undertake a dual-brand strategy in Europe utilising the distinctive and complementary brands of Betfair and Paddy Power.
A company statement on the talks read: "The combination has compelling strategic logic and represents an attractive opportunity for both companies to enhance their position in online betting and gaming and to deliver synergies, customer benefits and shareholder value."