Sky Bet sale agreed in deal worth up to £2.6bn

Sky Betting and Gaming, known as Sky Bet, is being sold in a deal worth up to £2.6bn.

Sky News reported at the weekend how Stars Group - the owner of PokerStars - was closing in on securing the company following weeks of talks.

Sky Bet is majority-owned by CVC Capital Partners, the private equity firm which used to control Formula One motor racing, and had been planning a £3bn flotation of the gaming company.

CVC (Taiwan OTC: 4744.TWO - news) holds 71% of Sky Bet's shares, while Sky plc (Frankfurt: 893517 - news) , the owner of Sky News, has a 20% stake.

The remaining shares are held by Sky Bet's management, including Richard Flint, its chief executive.

Rafi Ashkenazi, chief executive of Toronto-based Stars Group, said: "The acquisition of Sky Betting and Gaming is a landmark moment in The Stars Group's history.

"SBG operates one of the world's fastest growing sportsbooks and is one of the United Kingdom's leading gaming providers.

"SBG's premier sports betting product is the ideal complement to our industry-leading poker platform.

"The ability to offer two low-cost acquisition channels of this magnitude provides The Stars Group with great growth potential and will significantly increase our ability to create winning moments for our customers."

Stars said the deal would make it the biggest listed online gaming firm in the world amid a period of consolidation across the wider sector.

Sky said it would receive about £425m in cash and 7.6 million newly issued shares, or approximately 3% of The Stars Group, on completion of the deal, worth approximately £145m.

It added that it would use the proceeds to reduce debt and "reinvest in further growth opportunities".

The company's chief executive, Jeremy Darroch, said: "We are proud of what we have achieved from a standing start with Sky Betting & Gaming, crystallising over £1bn in value for shareholders.

"The ability to create innovative products and successfully challenge for share in completely new markets has become a pattern at Sky and gives us the continued confidence to open up new opportunities and invest for future growth."