Paddy Power owner's shares tumble as cash dividend pulled

With sporting many sporting events postponed, Paddy Power/Betfair has said that it expects to take an earnings hit this year

Paddy Power owner Flutter Entertainment is to pay its 2019 dividend to investors in the form of shares, rather than cash, as it looks to prudently manage its reserves in the face of industry uncertainty prompted by the Covid-19 outbreak.

The betting services group made the announcement as it published its shareholder circular regarding its proposed $6bn (€5.5bn) takeover of Canadian online poker and betting business The Stars Group.

Flutter has also scrapped plans for a pro-rated dividend, reflecting its merger plans, and has suspended plans for a dividend based on its 2020 performance.

Flutter’s normal 2019 dividend is worth 133p per share.

Shareholders will vote on the moves at Flutter’s AGM, which is currently scheduled for May 14.

The Paddy Power and Betfair owner recently said that it expects to take an earnings hit, this year, of at least £90m-£110m if international sporting events remain off until the end of August.

However, the dividend news sent Flutter’’s share price tumbling by around 12%.