What’s going on here?
Boyd Gaming is selling its 5% stake in FanDuel to Flutter Entertainment for a cool $1.75 billion, using the deal to secure extended market access and focus on financial strategies.
What does this mean?
With this strategic sale, Boyd Gaming will pocket around $1.3 billion after tax, channeling it toward reducing debt. They’re eyeing interest savings between $80 and $85 million as a result. Although the sale translates to a $50 to $55 million drop in EBITDA from its online division, Boyd gains access to expanded markets until 2038. Meanwhile, Flutter is pushing for full control of FanDuel, aiming to shave $65 million off its annual operating costs. A brokerage held its ‘buy’ rating for both firms, setting Boyd’s price target at $85, despite a recent dip to $80.71 per share.
Why should I care?
For markets: Rolling the dice in strategic shifts.
Boyd’s stock took a hit recently, yet analysts see potential upside with a target set at $85. This move to cash out and reduce debt could solidify its financial standing and appeal to investors looking for stability amid market fluctuations.
The bigger picture: Gaming industry poised for transformation.
Flutter’s complete takeover of FanDuel aligns with a broader trend of consolidation in the online gaming sector. As Flutter streamlines operations, other players might follow suit, reshaping the landscape of digital betting in pursuit of efficiency and growth.
