Flutter and TSG merger still on the cards
One of the biggest mergers in gaming history is moving forward amidst the chaos of world markets, according to Casino Aus.
Flutter Entertainment, the parent company of Paddy Power Betfair, announced its intention to acquire the Stars Group, the parent company of PokerStars, in October last year.
Almost one month ago, both companies released their year-end 2019 results in positive notes.
Flutter showed a 14 per cent revenue increase for the year to 2.14 billion pounds, with Australian revenue on par with overall numbers.
The Stars Group revealed a 25 per cent increase to $2.53 billion for the year, with its Australian revenue up 39.3 per cent alone.
Then, the coronavirus crisis spread across the world.
Flutter Entertainment dropped to its low point of 5,084 on the London Stock Exchange on March 26.
It climbed back to close at 6,552 on March 27.
In response to the market crisis, Flutter announced it will suspend the 2020 dividend while its board “monitors the sporting calendar, associated performance of sports betting and the combined group’s anticipated deleveraging and balance sheet position.”
The impact of the market disruptions will likely push its net debt to the first reporting period following completion about 3.5 times core earnings.
The Stars Group’s March 27 press release told a similar story but without dividends, as it has never done dividends.
The company will hold a special meeting of shareholders on April 24 with attendance and voting virtually as an option for most.
Aussie casinos stand down staff
The fallout from the spread of coronavirus throughout the world has been staggering.
Casino Aus reports that entire countries are on lockdown, societies are essentially closed and the threat of a deadly virus lurks on every surface and in every person.
The world has changed drastically in just a few months.
In Australia, coronavirus cases are rising slower than in many parts of the world, but still worsening.
In just two days, the number of cases in Australia has risen to more than 3000.
When businesses began to scale back due to the need for social distancing and self-quarantining, the stock market sunk in despair and in anticipation of worsening conditions.
Those conditions did, indeed, worsen over the past week.
Stores and businesses of all kinds were forced to close.
Restaurants closed. Casinos shut their doors.
It was a week predicted by sinking shares around the world.
Australian Prime Minister Scott Morrison ended a painful week by only stating that there will be a “hibernation” plan in place to help businesses and the entire economy rebound when the pandemic threat is over.
However, the lack of details from Morrison gave little reason for shareholders to be confident.
Crown Resorts was forced to close all of its casinos and restaurants this week, though hotel accommodations remained fulfilled in a limited capacity.
The result is evident in its market data, with Crown shares dropping from $10.24 on March 2 to $5.90 on March 20, when it halted trading.
Nearly 10,000 employees were stood down by Crown.
The Star Entertainment Group was under the same order as Crown and its share price took a sharp nose dive.
On March 3, shares were $3.78 and on March 25, they dropped to $1.565 with 90 per cent of its workforce temporarily stood down.