DAVY VIEW

The publication of Flutter Entertainment’s prospectus and circular relating to The Stars Group (TSG) transaction confirms progress made towards business integration (and associated value-capture). Among other things, it provides detail on (i) its first step in its refinancing package (£1.3bn of new facilities secured in early March on favourable terms) and (ii) refined Board/executive team composition. Of course, recent events have significantly impacted the global gaming sector. However, the company believes these strengthened the strategic rationale for the deal. Given that both companies have already guided that these will significantly impact near-term performance, it is no surprise that leverage is no longer expected to be c.3.5x on deal completion. It has also revised its dividend policy (2019 final to be paid in form of shares; 2020 dividends removed), reflecting its commitment to return its leverage to 1-2x over the medium term.