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Originally Posted by PTLou
good point. what sort of market share will this new beast have in the sports/casino/poker market?
another good point. There is a form of corruption in the merging / selling of public companies that is rarely discussed.
CEOs are there to represent shareholders and max shareholder value in these deals. However the companies they are negotiating with in mergers are the same ones offering CEOs (and other CXO's) buyouts, bonuses, and other forms of compensation in their new roles with the combined entity. Pretty strong conflict of interest.
Yes, share price increased 25+% overnight. Rafi Ashkenazi remains as COO. At the same time he was negotiating on behalf of TSG shareholders, he was also negotiating on behalf of Rafi. A huge conflict of interest. Nothing against him, this is just a major flaw in the system.
This combined with consistent underestimating of the challenges of merging two businesses with the consistent overestimating of strategic synergies, economies of scale, etc etc.... results in many of these mergers never meeting expectations. That all leads to this typical hyperbole...
blah blah blah
Flutter as I understand is just a bookmaker, whatever market share Stars had in online poker, that's the market share the combined new Flutter will have in online poker.
And CEO's exploring business combinations is not a conflict of interest: ignoring potential buyers could be a bigger problem for a CEO. In any event, if Stars' shareholders are unhappy about this, they will vote it down. You do understand that a CEO and the Board can only recommend to Stars' shareholders to accept the deal, shareholders can still vote as they please.
Ashkenazi is going from being CEO of Stars to COO of the new Flutter. CEO to COO is basically a demotion and most likely he is gone after 12-24 months after the merger, most likely.
I don't think you fully understand business and/or M&A. If you're the CEO working on getting your company acquired by another, you are basically negotiating for you to eventually lose your job. And if you don't like the idea of golden parachutes, think about it: sometimes it's in the shareholders best interest to be acquired, if a CEO didn't have some sort of golden parachute, they would have zero incentive to negotiate the sale of the company, which could be more harmful to shareholders.