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Newly filed accounts for FanDuel reveal that a group of founders are preparing fresh legal action against the firm, The Courier reports.
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Lesley Eccles, her husband Nigel, Thomas Griffiths and Rob Jones – filed a petition at the Court of Session in Edinburgh last year claiming its merger with Paddy Power Betfair purposely undervalued FanDuel’s worth.
Few could have predicted that FanDuel and fellow daily fantasy sports rival Draftkings would together dominate more than 70% of New Jersey's sports betting market as relative newcomers to the gambling industry despite around a dozen competitors in the space, many of whom have vast years of experience behind them.
The Courier writes:
Majority shareholders – the US private equity houses Shamrock Capital Advisers and Kohlberg Kravis Roberts (KKR), which respectively led $70m and $275m funding rounds in FanDuel in 2014 and 2015 – forced the sale and said there was not enough money raised for minority shareholders to be paid.
However, the founders believe that due to a relaxation of betting laws in the US, the company was significantly undervalued and that their shares are worth more than $120m.
FanDuel’s current CEO, Matt King, says the company board does not believe such legal action will be successful.
“The group’s (FanDuel’s) Scottish solicitors received intimation that the petitioners had ceased to instruct the legal team which had commenced the proceedings.
“Alternative counsel has been instructed by the petitioners and group’s counsel has been advised that the proceedings raised will not be insisted upon in their current form but that new alternative proceedings will be commenced.
“We understand that the new counsel team for the petitioners is currently framing the alternative proceedings but to date these have not been served on the group.
“No action has been taken meantime to progress the original proceedings.
“While it is possible the case reaches a merits determination, the group does not consider it probable and therefore no accrual has been recorded as of the balance sheet date.”
- Aaron Goldstein, Gambling911.com
