Flutter Entertainment PLC's (LSE:FLTR) acquisition of the final 5% it did not already own in FanDuel for US$1.8 billion does not undermine the bookmaker's valuation, according to analysts at Peel Hunt.
The Betfair and Paddy Power owner has secured full ownership of its US business by acquiring the stake from Boyd Gaming at a price that implies a valuation for FanDuel of US$31 billion.
Peel Hunt's analysts said their valuation for FanDuel is US$34 billion, "which we believe is not undermined by this valuation for a minority stake."
The transaction also extends Flutter’s strategic partnership with Boyd through to 2038.
Flutter said it expects to generate annual savings of around US$65 million, starting in July 2025, as a result of this transaction, which is being funded by a new 12-month senior secured loan.
"In the context of Flutter’s scale, we regard this transaction as a relatively minor tidying up of the business's structure," the analysts said, reiterating their 'add' recommendation and 22,300p target price.