Flutter eyes primary share listing switch to NYSE by year-end to attract more retail investors

Dublin-based Flutter Entertainment, FanDuel’s parent company, is aiming to switch its primary listing from London to New York in a bid to attract more US retail investors. The company on Monday asked shareholders to vote for the transition on May 1st to approve a shift in its primary listing to the US. 

Flutter, the world’s largest online gambling group by market cap, acquired US betting brand FanDuel in 2018. It already has a secondary listing on the New York Stock Exchange (NYSE), where ordinary shares were listed in January.

FanDuel, the leading online sports betting brand in the US, is part of a portfolio that also includes Paddy Power, PokerStars, Sky Betting and Gaming, Sportsbet, and Betfair. The brand controls 43% of the US market compared to 36% for rival DraftKings

Irish Times retrieved Flutter chair John Bryant’s letter to shareholders in advance of the May 1st annual general meeting, highlighting why New York is the “optimal location” for Flutter’s primary listing. He said the board believed the transfer would “further unlock long-term strategic and capital market benefits” that were already being realized by the US listing.

These include enhancing Flutter’s profile in the US, greater access to deeper capital markets and US domestic investors including through eligibility for listing on US indices, and greater liquidity for Flutter shares. Flutter has already voluntarily adopted several US reporting requirements to attract investment from domestic US funds and compete with US peers.

Bryant said that meeting domestic reporting requirements and maintaining a primary US listing are both eligibility requirements for inclusion on “important US stock indices, which is a major driver of domestic US fund ownership”. “The orderly transition to indexation on US indices is a key objective of the company,” he said.

However, he acknowledged that inclusion in US indices was “unlikely to be achieved in the very near term”, as the company has to demonstrate it meets eligibility criteria, but said the strategic and capital markets advantages of a primary US listing “outweigh these short-term considerations”.

Resolution requires over 75% of shareholder votes to pass

The resolution for the primary listing will need to be approved by at least 75 percent of voting shareholders to pass. Last year in April, more than 99 percent of Flutter shareholders voted in favor of establishing the US listing.

If passed, Flutter has said it anticipates the transfer of its primary listing to New York will happen on May 31st. The transfer of the primary listing to the US would mean Flutter would no longer be eligible for inclusion in UK stock indices such as the FTSE 100.

Bryant said that Flutter would maintain its standard listing in London “for as long as it is considered to be in the best interests of Flutter and Flutter shareholders as a whole." Flutter will remain incorporated and headquartered in Ireland and resident in Ireland for tax purposes.

In March, Flutter CEO Peter Jackson told the Financial Times: “We have FanDuel, and we want to make sure that our customers are able to buy shares in the company that owns their favorite entertainment provider."

At the time, he added that retail investors are “important components of the US market”.  Jackson also pointed out that there are many US investors, including institutional shareholders, who “only invest in their domestic market." 

US retail investors can already buy Flutter shares owing to the January listing but Jackson hopes the primary listing transition will further encourage them to do so, with the group having started reporting according to GAAP rules they are familiar with.

“Once they see some reporting in US GAAP, these are the codes and the language they understand. We hope that will facilitate new investors into Flutter,” he said.