Sky sells controlling stake in betting business to CVC
LONDON (Reuters) - European pay-TV group Sky (SKYB.L: Quote) has agreed to sell a controlling stake in Sky Bet to CVC Capital Partners [CVC.UL] in a deal which values the online betting business at 800 million pounds ($1.3 billion).
Sky said the sale would enable it to focus on the growth areas within its pay-TV business, where it has recently expanded into continental Europe with the purchase of Sky Italia and 90 percent of Sky Deutschland SKYDn.DE.
Sky, which has 20 million customers in Britain, Italy, Germany, Austria and Ireland, would receive 600 million pounds in cash at completion and would retain a stake of around 20 percent in Sky Bet, it said on Thursday.
It could also receive an extra 120 million pounds under the terms of a vendor loan and additional value based on private equity group CVC receiving a certain return on its investment.
Analysts at Citi said Sky could use the proceeds towards buying out the remainder of the minority shareholders in Germany.
"In the final analysis, we think a sale of Sky Bet is a sensible strategic move and, although likely dilutive to consensus earnings per share, net/net probably positive for the overall investment case," they said. "We rate Sky as a Buy."
Shares in Sky were up 1 percent in early trading.
CVC Partners, which has previously owned bookmaker William Hill (WMH.L: Quote), said Sky Bet's management and staff would remain with the company, which will maintain its close ties to the Sky Sports network.
"The partnership between CVC and Sky will provide a strong platform to support SkyBet's ongoing success at this exciting point in its development," it said. Continued...