In an update to clients on Thursday, Echelon Wealth Partners analyst Gianluca Tucci kept his “Tender” recommendation for The Stars Group (The Stars Group Stock Quote, Chart, News TSX:TSGI) after the betting business reported fourth quarter results. Toronto-based Stars Group, which owns gaming, sportsbook, fantasy sports and related consumer businesses and brands including PokerStars, PokerStars Casino, BetStars, Full Tilt, StarsDraft and the PokerStars tour brands, agreed this past October to be acquired by Irish betting company Flutter Entertainment for about C$9 billion in an all-stock deal. On Tuesday, Stars released its fourth quarter and year end financials, with Q4 revenue of $688 million, up from $652 million a year earlier, and adjusted EBITDA of $249 million, up from $239 million a year earlier. Its International, UK and Australia divisions represented $324 million, $288 million and $77 million, respectively, while Poker, Casino and Sportsbook revenues were $189 million, $211 million and $269 million, respectively. (All figures in US dollars unless where noted otherwise.) “In 2019, we continued to execute on our strategy to deliver long-term sustainable growth and become the world's favourite iGaming destination,” said Rafi Ashkenazi, Stars’ CEO, in a press release. “We not only began to see the full-year benefits of our transformative 2018 acquisitions, but executed on delivering a landmark media partnership in the U.S., with the launch of FOX Bet, strengthening our position in this emerging market.” “In 2020, we plan to further enhance the global appeal of the PokerStars brand, including by launching the PokerStars Sports brand, leveraging the operational capabilities of our Sky Betting & Gaming business, and launching television advertising for PokerStars Casino,” said Ashkenazi. On the fourth quarter, Tucci says TGSI’s revenue and EBITDA of $688 million and $249 million were better than the consensus $673 million and $243 million but mixed compared to the analyst’s own $704 million top line and EBITDA of $238 million. Management did not offer 2020 guidance due to the pending Flutter deal, but Tucci pointed out that betting stakes turnover was mixed across its three regions: up 15.5 per cent for International, up 13.2 per cent for the UK and down 9.4 per cent for Australia. “The combined entity will see Flutter shareholders own 54.64 per cent with the remaining 45.36 per cent owned by TSGI shareholders. The acquisition is seen to deliver substantial value creation in pre-tax synergies of £140 million per year along with cross-sell opportunities and lower finance costs and is expected to be at least 50 per cent accretive to FLTR EPS the first full financial year following closing,” Tucci said of the Flutter merger. “Flutter has entered into support agreements with various TSGI shareholders and directors, representing 23.79 per cent of existing issued common shares – two-thirds shareholder approval is required for the acquisition to pass,” Tucci noted. Both Flutter and TSGI shareholders are expected to vote on the deal during Q2 of this year, with completion expected by the third quarter. TSGI finished 2019 up 50 per cent, while so far in 2020 the stock is down 11 per cent.