888 shareholders to vote on William Hill deal this month
The shareholder vote will be held on May 16.
888 shareholders will vote on May 16 on whether to approve the company’s acquisition of William Hill’s non-US assets from Caesars Entertainment. Shareholders will meet in London at 10am.
Shareholders who cannot attend the meeting have until May 11 to apply to vote by proxy.
William Hill’s assets are larger than 888’s current business, which classifies the deal as a reverse takeover that must be approved by 888’s shareholders. The board has outlined why it supports the deal in a prospectus.
The board has also provided details about the expected impact of the UK government’s review of the 2005 Gambling Act. In that respect, it said that if the UK introduces a £2 per spin limit on online slots, bringing them in line with land-based FOBTs, that would hit anticipated revenue to the tune of £55m a year and EBITDA by £16.6m.
888 said the combined business would be the third-largest publicly traded online gambling operator in the world, becoming “an attractive omni-channel opportunity in the UK” and creating “a transformational opportunity for 888 to significantly increase its scale, further diversify and strengthen its product mix, and build leading positions across several of its key markets”.
888’s board says the deal would help it diversify and expand its presence in sports betting in regulated markets while gaining scale to achieve cost savings of £100m a year by 2025. It would achieve that by creating a single proprietary platform for the combined business and by removing duplicate marketing and licence costs.
William Hill’s performance in 2021
The prospectus outlines the financial performance of William Hill’s European business, which recorded a net loss of £229.4m in 2021. It reported £1.24bn in revenue, up 7.3 per cent year-on-year but down 14.7 per cent from pre-pandemic figures in 2019.
Over half of all revenue was generated by online operations in the UK, which saw revenue rise 25 per cent year-on-year to £628.6m.
Retail revenue was £336.8m, down 4.9 per cent from 2020 and down 53 per cent from 2019.
888, had it included William Hill’s revenue las year, would have generated revenue of $2.68bn and a loss of $368.5m for full-year 2021.
888 said: “The board believes that the integration of the target group can be achieved without causing any material disruption to the underlying operations of 888 group or the target business.”
888 Holdings has reached an agreement for a reduced price for the acquisition, saving it £250m, £100m of which will be kept as a 2024 earnout incentive depending on EBITDA performance.
888 said the seller, Caesars Entertainment, had agreed to lower its enterprise valuation of William Hill from £2.2bn to between £1.95 and £2.05bn due to a change in macroeconomic conditions and regulatory compliance factors since the original deal was made in September 2021. It still expects to finalise its takeover of William Hill by the end of H1 trading.
The reason for the reduction in value is a Gambling Commission licence review, which 888 believes will result in losses for William Hill.
See also: 888 Holdings slapped with £9.4m fine for AML and customer care breaches
