A potential major deal
Caesars Entertainment says that it is currently in advanced takeover talks with British sports betting operator William Hill in a deal that could be worth £2.9bn ($3.73bn).
Caesars has a 20% stake in the US operations of William Hill
US private equity firm Apollo Management has also made an approach to William Hill, actually doing so before Caesars’ first offer. Caesars stated that if William Hill goes with Apollo, it would put their US joint venture in jeopardy. Currently, Caesars has a 20% stake in the US operations of William Hill, with the betting operator having the exclusive rights to operate Caesars’ sportsbooks.
Caesars has a particular interest in William Hill’s 170 retail sportsbooks across 13 states. Caesars CEO Tom Reeg said: “The opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect.”
Specifics of a possible deal
William Hill originally announced on Friday that it had been approached with two takeover offers, after which its share price rose over 40%. Caesars has since revealed that its offer is £2.72 ($3.50) per share, almost 58% more than William Hill’s stock price the day before the offer was originally made on September 2.
In order to fund the takeover, Caesars stated that it is raising equity and will also take out $2bn worth of new debt, secured against the non-US businesses of William Hill.
There has been no indication as to how much Apollo is offering. It did make a written cash offer to William Hill on August 27 and made another offer shortly thereafter. As per UK law, both companies must make formal offers by October 23.
Latest potential major takeover
There have been a number of recent major acquisition deals in the gambling industry. In May, Flutter Entertainment and the Stars Group completed a merger in a deal valued at about $13bn.
The combination made Flutter Entertainment the largest online gambling business in the world, bringing together such popular gambling brands as Paddy Power, Betfair, and FanDuel with PokerStars and Sky Betting and Gaming.
In July, Eldorado Resorts acquired Caesars Entertainment in a deal valued at $17.3bn. It took a bit more than a year for the deal to close, first announced in June 2019. The newly formed company retained the Caesars name and is now the biggest casino group in the US with 52 properties.