ValueAct Buys $78M Stake in Flutter Before NYSE Listing

ValueAct Capital acquires $78.1 million stake in FanDuel's parent company, Flutter Entertainment, signaling strategic interest in the gaming sector.

By Alex P. Chase

5/16, 14:49 EDT
UBS Group AG Registered

Key Takeaway

  • ValueAct Capital discloses a significant stake in Flutter Entertainment, owning about 495,000 shares valued at $78.1 million.
  • Flutter's upcoming primary listing on the NYSE on May 31 aims to boost stock liquidity, coinciding with ValueAct's new investment.
  • Analysts speculate a strategic interest by ValueAct in Flutter, potentially signaling collaboration with UBS for long-term investment plans.

ValueAct Capital Invests in Flutter Entertainment

ValueAct Capital, a hedge fund known for its activist investment approach, has disclosed a significant stake in Flutter Entertainment, the Dublin-based parent company of the sports betting firm FanDuel. According to a recent securities filing, the fund, led by Mason Morfit, holds approximately 495,000 shares in Flutter, with a market value of around $78.1 million. This investment marks a new venture for ValueAct into the gaming and betting sector, following its history of involvement in various companies, including a notable proxy fight at Walt Disney. However, there has been no public indication from ValueAct that it is pushing for specific changes at Flutter. The stake represents less than 1% of Flutter's shares outstanding, as per data from VerityData.

Flutter's Market Position and ValueAct's History

Flutter Entertainment has recently increased its presence in the U.S. stock market by listing its shares on the New York Stock Exchange on January 29, a strategic move from its previous listings in European markets. The company is set to make the NYSE its primary listing on May 31, which is expected to enhance the stock's liquidity. ValueAct's investment in Flutter is not its first foray into the gaming sector; the hedge fund previously held a position in The Stars Group, which Flutter acquired in 2020. The disclosure of ValueAct's stake in Flutter comes at a time when the gaming company is poised for increased visibility and trading activity in the U.S. market.

Analyst Perspectives and Market Implications

Analysts have taken note of ValueAct's investment in Flutter, with Gordon Haskett analyst Don Bilson highlighting in a client note the potential significance of this move. Bilson pointed out that UBS also reported a stake in Flutter, suggesting a possible collaboration between ValueAct and UBS in building stakes in the company. Such a partnership could indicate a more strategic and long-term interest in Flutter by ValueAct, rather than a transient investment. This perspective is bolstered by the history of cooperation between ValueAct and UBS in previous investments.

Street Views

  • Don Bilson, Gordon Haskett (Neutral on Flutter Entertainment):

    "If that is so, it reduces the chances this it’s just flirting with Flutter and won’t be here for long."