Betfair takeover collapses after gambling group rejects offer

Gerald Corbett, chairman of Betfair, said the board believed a 985m cash offer was too low. Photograph: David Jones/PA

A potential 1bn takeover of Betfair collapsed on Monday night after the gambling group terminated talks with its private equity suitors.

The move came after the company had earlier been granted a 24-hour extension to a 5pm Monday deadline to conclude the talks, in a move that appeared to suggest a deal with a consortium led by CVC Capital Partners could be close.

However, late on Monday Betfair said a 985m cash offer – pitched at 950p a share – by the consortium that also included Betfair shareholder Richard Koch was too low.

Betfair chairman Gerald Corbett said: "The board has spent considerable time assessing the various proposals, including detailed discussions with the co-offerors.

"The board concluded that none of the proposals represented adequate value or acceptable execution risk."

The Takeover Panel had set Monday as the cut-off point for CVC to either raise its 912m bid from April or withdraw, after Betfair rejected the first 880p a share approach as it "fundamentally undervalued" the company.

Betfair shares closed down 3p at 895p on Monday, after trading as high as 947.5p during the day.