Mr Stewart Kenny - the Republic's best-known bookmaker - will pocket €2.6 million when Power Leisure floats on the London and Irish Stock Exchanges next month. Mr Kenny, who is chief executive of the company - which trades as Paddy Power Bookmakers - will see his remaining 8 per cent stake in the business valued at just under €10 million. Along with the other shareholders in Power Leisure, Mr Kenny will sell 20 per cent of his shares when the bookmaker floats.
The main shareholders are Mr Kenny and the two other bookmaker families which merged with Mr Kenny's firm of Kenny O'Reilly in 1988 to form Paddy Power. They were P Corcoran Bookmakers and part of the Richard Power bookmaking business. Mr John Corcoran, the former owner of P Corcoran and the founder of the listed property group Green Property, has a 23.63 per cent stake in Power Leisure and is the company chairman. Mr David Power, of Richard Power, has 17.20 per cent of the company.
They will realise €4.8 million and €3.4 million respectively and see the value of their remaining shares crystalise at €19 million and €14 million. The other large shareholders include ICC Bank, which has a 17 per cent stake in the company, and Mercury Private Equity, the UK venture capital company, which acquired a 9.8 per cent stake earlier this year.
Another 7 per cent of the company is held by senior executives with the remainder in the hands of a number of private investors not connected to the business. All of the large shareholders have agreed not to sell any additional shares for two years after the flotation. The company will also give between £1,000 and £2,500 worth of free shares to its 700 employees.
Power Leisure has decided to seek a stock market listing in order to be able to take advantage of "expansion opportunities and the consolidation that could potentially occur in the online betting sector", according to a statement released yesterday.
The move will also give the group greater access to capital markets and more flexible financing as well as providing existing shareholders with the opportunity to realise some of their investment.
The bookmaker had a turnover of €174 million in the six months to the end of June and made a profit before tax of €5.6 million. The flotation should value the company at €117 million, according to Mr Peter O'Grady Walshe, the company's finance director.
The group has 117 betting shops, making it the largest bookmaker in Ireland with a 30 per cent market share. Paddy Power is also the largest telephone betting operator in Ireland and has 10,223 registered users of www.paddypower.com, its online betting site.
The company plans to enter the British Internet betting market via a link-up with NTL, the cable company which will be offering betting as part of an interactive TV service.
Paddy Power has acquired a betting shop in London but does not currently plan to acquire more. "It is really to have a point of presence," said Mr O'Grady Walshe. The offering is being pitched at British and Irish institutions which the group hopes will be excited by the opportunities presented by the Internet, according to Mr O'Grady Walshe.
Betting was ideally suited to the Internet as, like stockbroking or information services, there was no physical transfer of goods, he said.
"We are a cash generating company, with proven skills, exploiting a new distribution channel. It has to be a very low-risk investment," he explained.
According to the figures released yesterday, the group had a net revenue of €8.8 million in the first six months of the year. The net assets of the business are valued at €19.9 million.
