Bookmaker Paddy Power has made its first move into the Australian betting market by buying a 51% stake in Sportsbet, which provides betting on Australian racing and other sports for online and telephone customers.
Paddy Power is paying an initial €27.2m for the stake - €25.7m in cash and the rest in 100,000 Paddy Power shares. Another €5.6m will be paid if Sportsbet's 2009 earnings top €9.2m.
Sportsbet also owns just under 20% of International All Sports, a publicly-quoted rival. Sportsbet's CEO Matthew Tripp will continue in his post, while Paddy Power will appoint four directors. The deal also includes options for Paddy Power to increase its stake up to 100% by 2012 or 2013.
The announcement came as the company released a trading update which said it is happy with current market forecasts for its performance this year.
The bookmaker said growth in the amount bet on sports has accelerated significantly in the last couple of months, due to its increased online business outside Ireland and racing cancellations in the first two months of the year. Paddy Power's AGM is taking place today in Dublin.
Shares in the company closed almost 5% higher at €15.99 in Dublin this evening, a gain of 73 cent.
