BOOKMAKER PADDY Power will pay up to €9.1 million to fund its Australian subsidiary’s purchase of a local rival.

The Dublin-listed bookie last month announced that it has bought a 51 per cent stake in Australian online betting business, Sportsbet, in a deal worth up to €32.8 million.

Yesterday the company said that Sportsbet has agreed to buy out another Australian bookmaker in which it already has a 19.98 per cent stake, International All Sports (IAS).

According to a statement, the deal values IAS at a total of €22.4 million.

Paddy Power and Sportsbet’s other shareholders have agreed to buy new shares in the Australian company to fund its purchase.

The statement yesterday said that the “maximum funding required from Paddy Power relating to its 51 per cent shareholding in Sporstbet will be $16.3 million Australian dollars (€9.1 million)”.

IAS shareholders and the Supreme Court of the Australian state of Victoria have to approve the deal. It has the unanimous support of the IAS board.

The agreement proposes that Sportsbet chief executive Matt Trip will take the same role at the expanded business.

IAS offers Australian customers betting on racing and other sports through online and telephone channels.

According to its latest figures, the company had profits before tax of €2.7 million in the 12 months ended June 30th, 2008. At the end of last year, it had assets of €23 million.

Those figures exclude a loss-making international business which it last month sold to British Virgin Islands-registered Yin Khing Investments, owned by businessmen Patrick Tay and Elson Yin.

IAS founder and managing director, Mark Read, listed the company on the Australian stock exchange in 1999. Its corporate offices are in Melbourne, and it is registered in Darwin.

Yesterday, Paddy Power chief executive Patrick Kennedy said that combining Sportsbet and IAS would create Australia’s biggest corporate bookmaking business.