- Bet365 could now be a more attractive takeover target
- Price could be steep, assuming Coates family wants to sell
Bet365 could be a takeover target as the UK sportsbook behemoth pulls back from Asia and expands in the US, according to a research firm.
In a new report, Eilers & Krejcik Gaming (EKG) points out that bet365’s recent moves could invite overtures from suitors, but that’s largely based on the premise that the company would be a willing seller — something that isn’t known at this point — and the ability of prospective buyers to afford a takeover price that could range from $10 billion to $12 billion.
Alongside its US expansion, bet365 recently pulled back on its Asian operations, speaking speculation it could be a more attractive takeover target, should anyone be able to afford it — and somehow persuade the Coates family to sell,” according to EKG.
The operator recently launched online sports wagering services in Illinois and Tennessee, and plans to participate in the opening of the Missouri market later this year. In addition to Illinois and Tennessee, bet365 is available in Arizona, Colorado, Indiana, Iowa, Louisiana, New Jersey, North Carolina, Ohio, and Virginia. With that roster, the company has access to 34% of the US adult population.
Based on US Market Share, bet365 Could Be Pricey
The US sports betting market doesn’t lack for takeover rumors, but that speculation rarely turns into notable deals.
Indeed, the US is the most desirable market for operators to enter or in which to add market share, but those factors aren’t guarantees of finalizing transactions. There’s also the issue of the DraftKings/FanDuel duopoly — one that’s made it difficult for competitors to cobble together adequate market share. As EKG notes, bet365 has 2.5% online sports betting share in the US, but that number is far higher in states, such as Ohio, where the operator was live from day one.
While bet365’s retreat from some Asian markets could be appealing to some would-be bidders, the valuation mentioned by EKG could be daunting based on the relatively low share in the US.
“A back-of-napkin valuation using a 12-15x multiple on 2024 pre-tax profit of ~$800 million (allowing for charitable donations to be offset by the divestiture of the Asia business) gets to around $10 billion-$12 billion,” says EKG.
Those charitable moves come in the form of contributions by the Coates family to various causes, including culture, education, and healthcare, among others.
Assessing Potential Buyers for bet365
EKG didn’t speculate on which companies could potentially kick the tires on bet365, but should a credible bidding process materialize, it would likely draw some private equity firms — usual suspects in gaming consolidation rumors.
Some such firms have long been tied to sports betting takeover speculation and that would likely be the case again if bet365 hits the auction block.
Owing to its suite of attractive Australian and European assets, bet365 could be attractive to a number of gaming companies looking to enter or expand in those regions, but a possible $10 billion to $12 billion price tag likely diminishes the number of viable US-based bidders.
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