Betfair IPO = No
Stephen Hill = Go
Betfair chief quits as firm postpones float plan
By Dominic Walsh
The chief executive of Betfair, the online betting exchange operator, has resigned abruptly after the privately owned company’s decision to postpone its plans for a £1 billion flotation.
Stephen Hill, a former chief executive of the Financial Times Group, left yesterday. His duties have been assumed by Sir Robert Horton, the former Railtrack boss, who became non-executive chairman in March last year ahead of a possible initial public offering (IPO).
The company said that Mr Hill had decided to leave after a board meeting at which it had been confirmed that the company had “no plans to float in the immediate future”.
A source close to the betting firm said that Mr Hill had wanted to press ahead with an IPO in the first quarter of 2006, whereas the rest of the board had decided that there was "no good reason" to do so.
The source cited the continuing search for a finance director and uncertainty over the Treasury’s forthcoming review of the way in which betting exchanges are taxed as factors in the delay. Owen O’Donnell quit as finance director in July after only 18 months in the job.
However, analysts said that a bigger factor was likely to have been the recent crash in sentiment towards online gambling stocks after PartyGaming’s warning of slowing growth prospects.
One analyst added: "I guess that they saw the valuation coming down and decided to pull it."
The biggest shareholders in Betfair are Andrew Black and Edward Wray, its founders, who between them have almost 30 per cent. Europeatweb, an internet-based fund controlled by Bernard Arnault, the LVMH boss, has about 10 per cent.
Betfair said that Mr Hill had left to pursue plans for a new venture that would invest in small and medium-sized companies, focusing on turnaround situations.
He is expected to get a payout equivalent to half his £325,000 salary, and it is believed that he will retain the 3.13 million shares that are held in an employee benefit trust in his name.
The shares are technically owned by him already and he is expected to retain them until he can crystallise the value after an IPO. They would be worth more than £20 million if Betfair were to attract a £1 billion valuation.
A former colleague at the FT, Charles Pretzlik, the newspaper’s UK Companies Editor, said: "I think it is fair to say (Mr Hill) is not one of those people who necessarily makes friends wherever he goes."
Saturday, October 15, 2005
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