Betfair in buoyant debut

THE founders of betting exchange business Betfair saw their paper fortunes rise yesterday as the company finished its first day on the stock market debut valued at £1.68 billion.

Andrew Black, a one-time professional gambler, and former City trader Edward Wray who together founded the business ten years ago, saw their combined stake valued at more than 380 million.

They both sold about a million shares in the flotation, worth around 15m, but still have more than a fifth of the business.

The shares rose by almost 20 per cent in conditional dealing to close at 15.50, lifting Betfair's market value to almost 1.7bn.

Overall, more than 200m was raised by shareholders through the sale of 15 per cent of the company. They include Japanese bank Softbank, which reduced its stake from 16 per cent to 11 per cent. No new shares were issued.

The opening valuation, which was near the top end of Betfair's previously announced price range, should make the company eligible for inclusion in the FTSE 250 Index.

Betfair claims to be Europe's largest online sports betting operator, with 2.5 million registered users.

It acts as a betting exchange, matching individual betters to each other.

Users can choose the odds at which they want to place a bet, while they can also bet both that an outcome will happen and that it will not happen.

The group recently announced that revenues grew 13 per cent to 340.9m in the year to 30 April, although pre-tax profits fell to 17.8m from 47.5m as a result of planned investment in the business. Unconditional dealing in the shares will start on Wednesday.