Questor: Betfair shows resilience as takeover talks collapse Betfair 854p Questor says Hold Gamble few saw coming Betfair's punters are used to high-stakes games. But until last month, few in the City would have expected that they would be placing bets on the gambling exchange itself. The stock was in danger of being forgotten by gaming analysts until on April 15, CVC Capital Partners, admitted it was in talks with two Betfair shareholders over a takeover bid for the gambling group, which has been a public company since 2010, when it floated at £13 a share. Three approaches were made, at 880p a share, 920p a share and 950p, before offer talks ended late on Monday night. Failed bid with an upside Before CVC first showed its hand on April 15, Betfair's shares were trading at 699.5p, meaning the stock has gained more than 20pc in value during the takeover tussle. They have fallen back 5pc to 854p since talks ended after the close of markets on Monday, but have been surprisingly resilient. Analysts point out that the takeover attempt came to nothing but shareholders still have CVC to thank, as it forced Betfair's chief executive, Breon Corcoran, who joined from Paddy Power last summer, to set out in far greater detail his turnaround strategy for the gambling group. Outlook gets an upgrade As part of the company's defence, Mr Corcoran upgraded forecasts, saying he expects full-year revenue to reach about £387m, up from previous guidance of £370m to £385m, while underlying earnings before interest, taxes and amortisation is likely to be in the region of £73m. A cost savings target was increased by £10m to £30m as the group focuses on regulated online betting markets and puts a greater emphasis on its fixed-cost sportsbook, launched last year to attract new customers intimidated by peer-to-peer betting on the exchange. Progress will take time Analysts appear to have faith in the new strategy and believe there is more progress to come, which will justify the Betfair board's rejection of CVC's final offer. But as with all turnaround projects, there are risks and progress takes time. Sportsbook customers tend to bet smaller sums and competition is tough in that part of the market. The exchange is also facing growing competition. The shares are trading on a 2014 price-earnings ratio of 16 times. While Questor believes Betfair has come a long way over the past six months, we retain our caution and our hold stance.