Form 4: Flutter 10% Owner Enters Total Return Swap

Kenneth Bryan Dart, a 10% owner of Flutter Entertainment plc, entered into a cash-settled Total Return Swap referencing 319,624 shares of common stock.

Summary

• Kenneth Bryan Dart, identified as a 10% owner of Flutter Entertainment plc, reported a transaction involving derivative securities.
• The transaction is a Total Return Swap (TRS) referencing 319,624 shares of Flutter Entertainment plc common stock.
• The reference price for the swap is $104.3424 per share.
• The swap is scheduled to terminate on March 2, 2028, and will be cash-settled at that time.
• Under the swap terms, the Reporting Person is obligated to pay the counterparty for any decrease in the market price below the reference price and will receive payment for any increase above the reference price.
• Monthly interest payments, based on SOFR, are required from the Reporting Person to the counterparty.
• The Reporting Person is entitled to receive payments from the counterparty equal to any dividends paid on the referenced shares during the swap term.
• Following this transaction, 1,172,477 derivative securities are beneficially owned indirectly.
• The swap is held by LBS Limited, an entity owned by Mr. Dart, who disclaims beneficial ownership except to the extent of his pecuniary interest.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral disclosure, detailing a standard financial instrument used by a significant shareholder to manage their economic exposure to Flutter Entertainment plc.

Positives

• Allows Kenneth Bryan Dart to gain economic exposure to 319,624 shares of Flutter Entertainment plc without direct ownership, potentially offering flexibility in portfolio management.
• Provides the Reporting Person with payments equivalent to dividends paid on the referenced shares, capturing income benefits.
• Offers upside potential for the Reporting Person if the market price of Flutter Entertainment plc common stock increases above the $104.3424 reference price.

Negatives

• The Reporting Person is obligated to pay the counterparty for any decrease in the market price of the referenced shares below the $104.3424 reference price, exposing them to downside risk.
• The Reporting Person is required to pay monthly interest to the counterparty on the financing leg of the swap, based on SOFR, which represents a recurring cost.

Risks

• Market price fluctuations: The Reporting Person is exposed to the risk of the underlying common stock's market price decreasing below the reference price, which would result in an obligation to pay the counterparty at settlement.
• Interest rate risk: The monthly interest payments are based on SOFR, exposing the Reporting Person to potential increases in financing costs if SOFR rises over the term of the swap.

Future Outlook

The Total Return Swap is scheduled to terminate on March 2, 2028, at which point it will be cash-settled based on the market price of Flutter Entertainment plc common stock relative to the $104.3424 reference price.

Industry Context

StockSavvy.ai notes that Total Return Swaps are common instruments used by large investors, particularly 10% owners, to manage exposure to a company's stock. This allows them to gain or hedge economic exposure to the underlying shares without directly impacting the company's share registry or voting rights, which is typical for significant stakeholders in the gaming and betting industry.

Related Party Transactions

• Kenneth Bryan Dart, a 10% owner, entered into a Total Return Swap through LBS Limited, an entity he owns, making this an indirect transaction involving a related party.

Stakeholder Impact

• Shareholders: No direct impact on outstanding shares or voting rights, but provides transparency into a significant shareholder's derivative positioning.
• Investors: Offers insight into the financial strategies and market views of a major investor in Flutter Entertainment plc.

Next Steps

• Cash settlement of the Total Return Swap on March 2, 2028, based on the market price relative to the reference price.
• Monthly interest payments based on SOFR will continue until the swap termination date.
• Receipt of payments equivalent to dividends on referenced shares will continue until the swap termination date.

Key Dates

Keywords

Flutter Entertainment, FLUT, SEC Form 4, Total Return Swap, Derivative, Beneficial Ownership, Kenneth Bryan Dart, 10% Owner, Gaming, Betting