FanDuel Founders & Staff Will Get Nothing From Sale
Common shareholders, which include the company founders and current staff, will reportedly get nothing from the company’s acquisition by Paddy Power.
US sports site, Legal Sports Report claims it has the offer to the shareholders for the ‘merger‘ of Scottish tech unicorn FanDuel, to the betting company Paddy Power, which show that ordinary share holders, which include the company’s current staff – and the original founders – will receive nothing from the acquisition.
In a PDF file available through the website, the offer documents are quoted as saying:
“The aggregate value of the consideration to be paid by the Company in the Offer is approximately $465 million. As this consideration is not sufficient to satisfy the aggregate preference payable on the A Preference Shares, no part of the consideration payable in the Offer will be payable on FanDuel’s ordinary shares or options to purchase FanDuel’s ordinary shares.”
The company’s major shareholders, KKR and Shamrock used a ‘drag along’ right, which compels minority shareholders to accept the majority shareholder’s decision. In this case:
the “aggregate preference amount payable with respect to the A Preference Shares is $543,255,315.40 plus £11,658,295.57 pounds.”
Legal Sports Report also claims that the company’s current executives will all benefit from the transaction, listing the amounts each will receive:
- CEO Matt King – $11,342,688
- Chief Technical Officer Robin Spira – $3,517,833
- Chief Legal Officer Christian Genetski – $6,186,814
- Chief Financial Officer Andy Giancamilli – $4,957,685
- EVP of Corporate Strategy David VanEgmond – $2,601,338
- Chief Marketing Officer Mike Raffensperger – $1,693,375
LSR also reveals that Mr King previously worked at FanDuel investor KKR. He is also said to be in line to take over all US operations for PaddyPower Betting as it moves toward sports betting.
Founded in Edinburgh in 2009, FanDuel pioneered daily fantasy sports gaming, with around 6 million users, with around 40% of the US FDS market. In 2017, the company planned to merge with it’s biggest rival, Draft Kings, in a deal which was blocked by the US Federal Trade Commission. At that point the company started looking for a new buyer. A merger with PaddyPower Betfair PLC was proposed in May 2018.
Alongside fellow Edinburgh company Skyscanner, FanDuel grew to become one of Scotland’s two high profile tech ‘unicorns’, valued at more than $1 billion apiece.