The billionaire Coates family behind Bet365 are weighing up a sale of their online gambling empire that could value the business at £9bn, the Guardian has learned.
The company, headed by Denise Coates, has held talks with Wall Street banks and US advisers in recent weeks about a full or partial sale, sources familiar with the matter said.
Informal discussions explored options for a potential sale, including a medium-term plan to float the business on a US stock exchange.
One option on the table includes a partial sale to a private equity investor, with the Coates family retaining a stake before an eventual listing. It could also see a spin-off of part of the business, rather than a full listing of the Stoke-on-Trent-based firm.
A second source said they were also aware of discussions with private equity groups about taking a pre-float stake.
One person with knowledge of the talks said Bet365 had reached the “beauty parade” stage, where companies sound out banks they think could help them extract maximum value from any deal.
Bet365 did not return requests for comment.
Selling Bet365 could net Denise Coates, 57, more than £5bn, based on her 58% stake. It would cap an extraordinary growth story rooted in the humble origins of a Portakabin in a Stoke car park.
Under Coates’s stewardship, Bet365 pioneered online gambling technology, coming from a standing start to eclipse far more established brands such as Ladbrokes and William Hill.
In recent years it has expanded into the US, capitalising on a sports betting boom that began in 2018 when the supreme court overturned a decades-old federal ban on the practice.
Since then, Bet365 has won the right to operate in 13 states and is pursuing new licences as more states introduce regulated betting.
The Coates family have taken several steps recently that would make Bet365 more attractive to US investors. Earlier this year, the company announced it was pulling out of China, a market where its presence had stoked controversy because betting is illegal there.
In August last year, Bet365 transferred ownership of Stoke City football club to John Coates, the brother of Denise.
“It would be very difficult to have China exposure given the level of scrutiny that might be applied in the US, and why would you have a football club attached, that’s a family legacy,” said Paul Leyland, the director of the gambling consultancy Regulus Partners.
He said a sale in the US was “compelling for everybody”, providing an exit for Denise Coates and, for cash-rich US investors, offering a proven success in a growing industry.
“There’s more money chasing gambling than there are gambling companies that are investable,” he said.
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The gaming consultancy Eilers & Krejcik Gaming (EKG) estimates that revenues in US sports betting will soar from about $14bn last year to more than $23.3bn by 2029.
Bet365 has a market share of about 2.5% and EKG believes it is aiming for a double-digit take.
“That is not an easy or cheap market to crack and potentially requires more funding to enable them to aggressively attack the opportunity,” said Alun Bowden, an EKG analyst. “Now feels a very good time to explore exit opportunities, and the timing feels right with Denise turning 60 in two years’ time.”
EKG has previously valued Bet365 at up to $12bn (£9bn), based on typical valuations in the industry and the company’s pre-tax profit of £627m last year, on revenues of £3.7bn.
Denise Coates is already famed for the record-breaking pay and dividends packages by which she has extracted £2bn from the company she built. Since 2019, Britain’s best-paid woman has increased her holding from 50.2% thanks to her parents, Peter and Deirdre, transferring their shares to her.
Bowden said: “For decades people have been telling me the one business they wish they could invest in was Bet365, and while there is a bit of an industry consensus that they are a fading star, they remain one of, if not the best, online sports betting business in the world, with huge headroom for growth in casino, the US and many other markets. I don’t think they will have many problems.”
Coates’s father, Peter, the 80-year-old son of a miner, was a successful local businessman in the catering industry, who owned a string of betting shops. But it was Denise, an econometrics graduate, who at around the turn of the millennium became aware of the jackpot opportunity that lay online.
She bought the Bet365.com domain name from eBay for $25,000 ($18,000) and borrowed against the bricks-and-mortar stores to develop sports betting technology that left slow-moving rivals in the dust.
She is famously shy of publicity but in a rare interview with the Guardian in 2012 she said her family’s story made them the “ultimate gamblers”.
Source: theguardian.com
