The Coates family, which owns Bet365, is considering selling its online betting group for around £9 billion, according to The Guardian.
In recent days, Denise Coates, who leads the company, has held talks with US consultants and Wall Street banks to evaluate a full or partial sale.
These initial discussions assess alternatives for the future of the business, including an IPO on US stock exchanges in the medium term.
Understand the possibilities
Options being discussed include a possible partial sale to a private equity fund, with the family retaining a stake ahead of a future listing. There is also talk of spinning off some of the assets rather than taking the Stoke-on-Trent-based company public.
Another source familiar with the case also confirmed talks with private equity funds regarding a stake before the IPO.
If the sale goes ahead, Denise Coates, 57, could receive more than £5bn for her 58% stake in the company. This represents the consolidation of a growth trajectory that began with a mobile kiosk in a car park in Stoke.
Under the leadership of Denise Coates, Bet365 has brought innovation to the world of online betting, beating traditional competitors such as Ladbrokes and William Hill.
In recent years, the company has expanded its operations to the United States, capitalizing on the growth of sports betting following the 2018 Supreme Court decision that overturned a decades-old federal ban.
Since this change, Bet365 has obtained authorization to operate in 13 American states and continues to seek new licenses in light of the expansion of regulated betting.
Bet365 announces exit from China
The Coates have taken a number of recent steps to attract investors in the United States. Earlier this year, Bet365 announced it was pulling out of China, a market where its operations have been controversial, as betting is prohibited in the country. In August last year, the company transferred ownership of Stoke City to John Coates, Denise’s brother.
Paul Leyland, partner at Regulus Partners, said first: “It would be very difficult to have exposure to China given the level of scrutiny that can be applied in the US, and why would you have a football club linked to it? That’s a family legacy.”
He added that the possibility of selling in the US “appeals to everyone” as it offers an exit for Denise Coates and provides access to a successful business in a growing sector for American investors.
Revenue forecast until 2029
Consulting firm Eilers & Krejcik Gaming (EKG) predicts that sports betting revenue in the US is set to grow from $14 billion last year to more than $23.3 billion by 2029.
Bet365’s market share is around 2.5%, but EKG says the company is aiming for double figures. According to EKG analyst Alun Bowden: “This is not an easy or cheap market to penetrate and potentially requires more funding to be able to pursue the opportunity aggressively. Now seems like a great time to explore exit opportunities, and the timing seems right given Denise will be 60 in two years’ time.”
According to EKG’s previous valuation, Bet365 was valued at as much as $12 billion (£9 billion). This was based on industry standards. It also took into account pre-tax profits of £627 million on revenues of £3.7 billion last year.
History of Bet365
Denise Coates is known for her hefty pay packages and dividends. She has also withdrawn £2 billion from the family business. Since 2019, she has increased her stake to 58% after transferring shares from her parents, Peter and Deirdre.
Bowden also revealed: “People have been telling me for decades that the only business they would want to invest in is Bet365. While there is a consensus in the industry that it is a fading star, it remains one of the best, if not the best, online sports betting companies in the world, with huge room to grow in casinos, the US and many other markets. I don’t think they will have much trouble.”
Peter Coates, Denise’s father, is the son of a miner and built a career in the food and betting industry. However, Denise, who has a degree in econometrics, identified the potential of the online segment in the early 2000s.
It purchased the domain Bet365.com on eBay for $25,000 and secured loans from brick-and-mortar stores to develop sports betting technology ahead of its competitors.
Known for avoiding the spotlight, Denise Coates, in a rare interview with the Guardian in 2012, declared: “Our family history has made us the ultimate players.”