Will CVC gamble on Betfair for added horsepower in its stable?

CVC already has one portfolio company with pretty substantial horsepower, having acquired Formula One back in 2006 for USD 1bn and subsequently divesting a minority stake for USD 1.6bn in 2012, which provided them with a tidy return on investment. However, over the weekend there was speculation it is having a close look at online betting exchange Betfair and is in the process of tabling a bid for the listed group.

Betfair has had to face a number of hurdles since floating just over 15 per cent of its shares on the London Stock Exchange back in October 2010. Like online grocery retailer Ocado before it, the internet gambling business became another household name to receive a lukewarm reception for its shares in the initial public offering.  It has had changes in its senior management team and had to focus more on regulated betting markets after tax legislation issues affected all betting companies.

However, CVC must feel that this is one punt they can afford to take.