View from Dublin: questions over deal
Paddy Power Betfair (PPB) has been first past the post in tying up a merger deal with FanDuel, the American fantasy sports operator co-founded by Co Tyrone man Nigel Eccles.
Analysts like the deal which will see PPB with a 61% stake in a business which combines FanDuel and PPB's existing US operations.
PPB's American business is valued at around $612m in the deal and the Irish company will pay FanDuel shareholders $158m in cash.
This looks like a great deal for Paddy Power because it gives it access to a recognised American brand and around five million customers who are interested in betting.
But there are a few questions about the deal. FanDuel has raised close to $400m in equity from investors in recent years in six funding rounds.
Their planned merger with Draftkings was scuppered by the American Federal Trade Commission last year on competition grounds.
Its last fund raising was said to value FanDuel at over $1bn. But this Paddy Power deal appears to value the FanDuel business at closer to $400m or, in other words, what investors have put in so far.
FanDuel has gone head-to-head too with Draftkings by spending huge sums on advertising.
It was probably going to have to raise a lot more cash in the years ahead to fund marketing and other costs associated with the liberalising of gambling laws in different states.
This gives investors some cash back and a 39% stake in a bigger game, along with a cash-rich majority shareholder in the form of Paddy Power.
It is clear some of the momentum has gone out of valuations for both FanDuel and Draftkings since their merger was blocked a year ago. Paddy Power has done well, but it still needs to win licences, assuming various states back legalising gambling and then spend big in the US market, before it can reap those rewards. This is without knowing yet what sort of regulatory and taxation barriers might be put in place.