Betfair unveils flotation plans that could value firm at £1.5bn

The planned listing on the London Stock Exchange will enable founders Ed Wray and Andrew Black to sell some of their holdings in the company. They launched the business 11 years ago and own a combined 24 per cent stake in the firm.

The flotation, which has been the subject of City speculation for some time, is expected to earn Betfair a place in the FTSE 250 Index if it goes ahead.

A number of companies have struggled with flotations this year, with online grocery firm Ocado seeing its share price dive following its stock market debut, despite slashing the price of the shares for the initial public offering (IPO). Betfair, which has yet to provide pricing details for the offer, said it expected around 10 per cent of the company to be sold by a number of its major shareholders. There are 14 major investors holding 75 per cent of the company and Betfair said more than half of this group were likely to participate in the share sale.

A further 600 shareholders, who own around 25 per cent of the company, will also be given the opportunity to sell stock. No new shares will be issued in the offer.

Mr Wray, who with Mr Black will sell around 10 per cent of his holding, said the announcement represented a landmark in Betfair's history.

He added: "Becoming a publicly listed company will provide Betfair with the heightened profile and enhanced transparency that will help us cement our long-term relationships with customers, regulators and business partners around the world."

Betfair claims to be Europe's largest online sports betting operator, with 2.5 million registered users. It acts as a betting exchange, matching individual betters to each other.

In the three months to the end of July, revenues from sports betting rose 24 per cent to 63.5m due to the World Cup and as the number of active customers in the segment grew by 47 per cent to 472,000. Cross-selling from the tournament also boosted the casino division, which lifted revenues 26 per cent to 16.7m.