Flutter has bought Stars.

Fox’s investment in gambling just got a whole lot more interesting. Back in May, Fox paid $236 million for a 4.99 percent stake in The Stars Group (a Canadian gaming company that owns the likes of PokerStars and Full Tilt Poker), part of a wide-ranging partnership that saw Stars developing two betting apps for Fox (one free and one paid) and gave Fox the chance to buy more of the company in the next 10 years. Now, Stars has been bought by Flutter, the Ireland-based parent of Paddy Power, Betfair, and FanDuel. And as Bloomberg’s Eben Novy-Williams tweeted Wednesday, Fox now has an option to buy more of the combined company:

Bloomberg’s Thomas Seal has more on the acquisition here:

Flutter Entertainment Plc is buying The Stars Group Inc. in a $6 billion all-share deal to create the world’s biggest online gaming group and take advantage of opportunities in the U.S. after the Supreme Court legalized sports betting.

Flutter, headquartered in Dublin, said in a statement it has offered 0.2253 of its shares in exchange for each Stars share.

…The new group would have had revenue of 3.8 billion pounds last year, making it the world’s biggest online betting and gaming company, and the deal will achieve pretax synergies of about 140 million pounds a year, according to the statement.

Seal notes that both companies’ stocks rose on this news, and that this created an instant profit for another investor who also bought a similar stake to Fox earlier this year.

The deal has handed Jeff Ubben’s ValueAct Capital Management a significant windfall. The activist fund built a 4.7% stake in Stars Group in the second quarter, when the average share price was $17.76. The stock traded at $19.02 after the Flutter deal was announced.

“We are very excited about this transaction,” said Alex Baum, vice president at ValueAct. “We have been an engaged shareholder in Stars Group for some time and are delighted to see innovative, emerging companies becoming the growth companies of tomorrow.”

So Fox’s investment in Stars has already seen some growth just from the rising shares, to say nothing of the apps. And while they’re no longer able to take up to 50 percent of Stars, they now have an option to buy 18.5 percent of a much bigger company. If sports gambling keeps growing the way they seem to think it’s going to (see their various other investments in gambling, including daily gambling show Lock It In), that could be worthwhile for them indeed.

[Bloomberg; image via Poker News]

About Andrew Bucholtz

Andrew Bucholtz has been covering sports media for Awful Announcing since 2012. He is also a staff writer for The Comeback. His previous work includes time at Yahoo! Sports Canada and Black Press.