For sale, bidders welcome

The Betfair/CVC conversation fell apart late last night, about 20 hours before the end of a 24-hour extension that had been granted by the takeover panel, presumably at Betfair's request.

This morning, the Betfair share price opened down about 9%, and has since recovered from an 80pence fall to be down only 30p on the day. Something, it would seem, is afoot.

Quite what, is not absolutely clear. But I gather that in contrast to what is being said in public, the private briefing coming out of the company (and I should stress that I have spoken to no-one there, nor anyone involved in the bid) is that pace the CVC statement which suggested that the two sides could not agree financial terms, in reality it wasn't price that was the issue: the sticking point was strategy.

On the basis that sellers are not usually concerned about what the strategy of a buyer is going forward, the natural conclusion must be that in some way, the CEO and management team were integral to the CVC bid. If, despite this, there was a disagreement on strategy, it must also mean that their being integral was not a CVC condition, but one put down by one (or a group) of the selling shareholders.

In other words, what it looks like has happened is this: CVC and Richard Koch have come to the table with a strategy perhaps not dissimilar to the Fantasy Betfair one that I outlined recently ; and the CEO and his team said they preferred to run in the direction they have already set. At least one big shareholder must then have insisted that Breon Corcoran was part of the future make-up, and that unless he (Breon) were, he (the shareholder in question) wouldn't agree to the deal. And as a result, everything fell apart.

If that's right (and it would  explain why the share price has recovered as well as it has), it suggests that there's a For Sale sign over the company, for better or worse. I'd be surprised, at any rate, if it turns out that this bid story is done.