FTSE100-listed Flutter Entertainment has underlined that its multi-billion pound merger with The Stars Group Inc (TSG) remains on track, as the group plans to undertake several COVID-19 adjustments.
Planning for 2020 disruptions, Flutter confirmed that it has secured a new debt arrangement which provides the company with access to a £1.3 billion revolving credit facility, supporting the group’s business continuity directives.
The terms of its new credit arrangement are contingent on Flutter securing its TSG merger, in which Flutter expressed confidence in its schedule to complete the deal in H2 2020 – subject to regulatory approvals.
In its update, Flutter maintained that global COVID-19 disruptions will have an impact on the ‘financial profile of the combined group’. However, the operator group praised its M&A focus, stating that stronger cash generation, scale and combined synergies will help the business outride COVID-19 factors.
Refinancing its business, Flutter has moved to replace its 2019 133p per share cash dividends. Instead the FTSE betting group will propose that dividends are paid in new Flutter shares at the end of year trading.
Further investor developments also see Flutter suspend its prior TSG merger entitlement, which rewarded existing investors with a dividend payment prior to deal completion – Flutter underlined that the reward was no longer prudent under business circumstances.
Both merger parties have agreed to publish an updated investor prospectus in relation to deal proceedings later this month.
Peter Jackson, Chief Executive of Flutter, said: “We are pleased to publish our prospectus and circular in relation to our combination with The Stars Group. In these challenging times I am more convinced than ever of the strategic fit of these two complementary businesses.
“We continue to work with various competition and anti-trust authorities globally to secure the few remaining approvals required. We do so while never losing sight of our current primary objective to ensure the safety of our staff and customers during these unprecedented times.”
Further to the merger update, Flutter and TSG have agreed numerous changes to the firm’s board structure.
TSG executives Divyesh Gadhia, Rafi Ashkenazi, Richard Flint, Alfred F. Hurley, Jr, David Lazzarato and Mary Turner will be absorbed as non-executive directors of an enlarged Flutter-Stars business entity.
Should the merger be completed, Divyesh Gadhia will take the role of new deputy chair of the board. Board level changes also dictate that current TSG Group CEO Rafi Ashkenazi will not now serve as the combined Group COO following ‘extensive discussions about the optimal construct of the senior executive team’.
Meanwhile, Flutter non-executive directors Jan Bolz and Emer Timmons have confirmed that they will no longer serve as advisors to an enlarged business entity. Flutter Senior Director Ian Dyson is expected to relinquish Chair of the nominations committee duties to Andrew Higginson.
Commenting on the proposed Board changes, Gary McGann, Chair of Flutter, said: “I am looking forward to working with the new Flutter board in realising the exciting opportunities that will emerge from the combination of these two great companies.
“I would like to take this opportunity to note the commitment and dedication shown by Emer and Jan during their time on the Flutter Board, to thank them for their support and to wish them both well for the future.”