By Razak Musah Baba
LONDON-- Sky PLC is selling a controlling stake in gambling
business Sky Bet to private-equity firm CVC Capital Partners for up
to GBP720 million ($1.13 billion), to focus on its pay-television
operations.
Sky said Thursday it would receive GBP600 million in cash on
completion of the deal and potentially a further GBP120 million at
a later date depending on certain conditions.
Sky said it would retain a 20% in Sky Bet and ongoing board
representation. As part of the deal, which values Sky Bet at GBP800
million, Sky has also entered into a long-term brand license
agreement with business.
"The total value of GBP800 million represents a multiple of 15x
Ebitda [earnings before interest, taxes, depreciation and
amortization] for the 12 months ended June 30," the company
added.
Sky Chief Executive Jeremy Darroch said, "In the last 10 years,
we have successfully grown Sky Bet from a startup to one of the
leading online betting and gaming companies in the U.K. This
transaction will allow us to focus further on the substantial
growth opportunities in our core international pay-TV business
while realizing significant value for our shareholders."
The transaction is subject to regulatory clearances in the U.K.
and Ireland and is expected to close in the first quarter of
2015.
Sky shares were up 1% to 936 pence in morning London
trading.
Sky, which until recently was known as British Sky Broadcasting
Group, counts 21st Century Fox as its largest shareholder with a
39.1% stake. Until June 2013, 21st Century Fox was part of the same
company as News Corp, the owner of The Wall Street Journal and Dow
Jones Newswires.
Write to Razak Musah Baba at Razak.Baba@wsj.com
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