Cayman Islands-based billionaire Kenneth Dart is nearing a 30 per cent stake in Flutter Entertainment but is expected to avoid the usual requirement to launch a takeover bid if he reaches that threshold because of the structure of his holding.
Dart, heir to a foam-cup manufacturing fortune, has increased his interest in the gaming giant behind brands such as Paddy Power, Betfair and FanDuel to 28.7 per cent, according to calculations based on company filings.
An investor in an Irish publicly-traded company is required to make a takeover offer for the entire business if their holding breaches the 29.9 per cent level – except when the takeover panel issues a waiver in certain situations, such as the shareholder participating in a rescue financing or underwriting an equity fundraising.
While Flutter moved its main listing and operational headquarters to New York two years ago, it remains incorporated in Ireland. Flutter is led by chief executive Peter Jackson.
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Irish companies listed in Dublin, London and the New York Stock Exchange and Nasdaq qualify as relevant companies that fall under the jurisdiction of the Irish panel for the oversight of takeover rules.
However, some 9.87 per cent of Dart’s exposure in Flutter is not held by way of ordinary shares, but by financial derivatives called cash-settled equity swaps, which do not have voting rights. Because these instruments carry no voting rights, they would not normally count towards the mandatory bid threshold under Irish takeover rules.
Dart’s stake is worth $5.5 billion (€4.76 billion), with the stock having slumped about 60 per cent since he revealed he had taken an initial position last September. Still, buying into a declining market has helped him lower the average price at which he has bought shares and entered into the equity swap transactions.
The sell-off has been driven by FanDuel, the US’s biggest online sports betting company, being a late arrival to the fast-growing predictions market, where people can place wagers on everything from elections and the weather to whether a new phone will sell a million units.
The stock has stabilised since early May, when Flutter made management changes at FanDuel, with the unit’s chief executive Amy Howe, who took on the role in 2021, being replaced by the business’s president, Christian Genetski.
The changes came a little over two months after Flutter surprised analysts by forecasting 2026 core profit growth of 4 per cent compared with growth of more than 20 per cent in each of the previous four years, citing challenges in the US market, where FanDuel has a leading 39 per cent share.
Flutter delisted from the Irish stock market two years ago as it moved its main listing to New York. The group confirmed on Friday that it also plans to quit the London Stock Exchange in August, having carried out an analysis of the level of trading activity in its shares on that market as well as the additional cost, and regulatory and administrative obligations arising from retaining the listing.
Dart’s family wealth stems from his grandfather who founded Dart Manufacturing, the world’s largest maker of styrofoam cups.
Over decades Dart expanded his wealth by buying distressed sovereign debt from countries including Argentina, Brazil and Greece – often engaging in lawsuits to squeeze more out of debtors seeking to restructure their borrowings.
He is also the largest shareholder in Evolution, a Swedish online casino tech company, and in recent years has amassed big stakes in tobacco giants British American Tobacco and Imperial Brands, defying an ethical exodus from such companies.
While Dart kept adding to his position over the past nine months in the hope that the stock will rally, some of the world’s biggest hedge funds, AQR Capital Management, DE Shaw, Marshall Wace and Two Sigma Investments, are betting on further declines, with short positions totalling nearly 5 per cent of the stock.
