(Adds details of placing, background)
DUBLIN, May 28 (Reuters) - Paddy Power and Betfair's parent Flutter Entertainment FLTRF.I announced a share placement on Thursday that will see U.S. media group Fox Corp FOXA.O increase its investment in the group.
Flutter said 8 million new shares would be placed with institutional investors via an accelerated book build to be launched immediately, as the Irish betting group looks to go on a deal spree and finance cost savings.
The placement comes three weeks after Flutter completed its merger with Stars Group Inc (TSG) TSGI.TO .
Flutter said in its statement on Thursday that Fox, which bought a 4.99% stake in Stars in May last year for $236 million, would increase its investment in Flutter as part of the placement but did not say how many shares it was acquiring.
Under the terms of Flutter's merger with Stars, Fox has the right to acquire an 18.5% stake in Flutter's FanDuel U.S. business from 2021.
Flutter, which currently has 146 million ordinary shares in issue, did not give any guidance on how much it hoped to raise from the share placement. Its shares closed at 106 pounds on Thursday ahead of the announcement.
In a separate statement, Flutter said that its revenue in the second quarter so far has increased by 10% from a year earlier, despite widespread ongoing disruption to global sports. momentum was driven by good online performance in poker and other gaming, it said. Strong momentum in the United States and Australia, which are both holding horse races behind closed doors, partially mitigated the impact on national lockdowns in Europe.
Flutter said it decided to raise funds as the current operating environment was likely to result in long-term changes in the sector, which it believed would present opportunities.
Specifically it said the COVID-19 pandemic could lead to an increase in the pace of regulatory change in the United States and may increase the number of states looking to raise additional tax income.
It said the funds could also be used to invest in retaining recent new customers who had moved to the group's online offerings during the crisis.
It will also help strengthen the group's balance sheet and bring interest cost savings and reduced annual cash outflows.