Internet betting exchange Betfair has today rejected an initial bid from CVC Capital Partners, a private equity firm that owns the Formula One Group, on the basis that it undervalued the publicly-listed company and was “highly conditional.”

The preliminary proposal from CVC Capital Partners consisted of an offer price at 880 pence per share, worth a reported £910 million ($1.38 billion USD). Betfair was also given an “unlisted sercurities alternative”, which would have included shares and loan notes as part of a new entity following the completion of the deal.

The conditions, Betfair notes, included some standard due diligence, the “arrangement of appropriate financing” and proof of recommendation from the company board.

Gerald Corbett, chairman of Betfair, has stood firm and defended the company’s future prospects.

“We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise,” he said. “Our new management team are implementing the strategy announced in December 2012 and it is this that will realise value for shareholders.”

Mr Corbett said that to reassure Betfair shareholders, the company would provide an update on the progress of its new strategy, including cost efficiencies and its recent trading performance, on May 7.

Betfair acquired rival online betting exchange Blue Square for £5 million ($7.6 million USD) last month. The deal included all of Blue Square’s customer database, redirecting all existing users to Betfair’s website henceforth.

The proposed deal from CVC Capital Partners was notable because Betfair went public and entered the London Stock Exchange in October 2010, priced at £13 per share. Accepting the takeover bid would have effectively reversed this move, however, making it a private company once again.

Betfair was founded by Andrew Black and Edward Wray back in 2000 and has since grown to become one of the world’s largest online betting exchanges.

The company employs more than 2,000 people and holds betting licences in numerous countries including the UK, Gibraltar, the US, Australia, Italy, Denmark and Malta.

It hasn’t been smooth sailing recently, however. The company sold its minority stake in social gaming firm Kabam last December, following plans to cease all operations in Cyprus, Germany and Greece.

Betfair is still headquartered in the UK, but has since moved offshore and is now registered in Gibraltar.

 Image Credit: MIKE CLARKE/AFP/Getty Images