The US operator intends to sell the bookmaker’s UK and European retail networks after its £2.9bn acquisition.
UK.- The directors of the British bookmaker William Hill have unanimously recommended that shareholders accept a £2.9bn takeover bid from US casino operator Caesars Entertainment.
The company’s chairman, Roger Devlin, said Caesars’ offer of £2.72 cash per share was an attractive price for shareholders and “the best option” for William Hill.
The price represents a premium of more than a quarter compared with William Hill’s share price last week before Caesars’ interest was made public.
William Hill has turned down two rival bids by US private equity group Apollo.
The deal, which must be accepted by 75 per cent of William Hill shareholders to go ahead, will give Caesars access to the growing US sports betting market.
The casino operator says the deal will allow it to broaden its existing US online sports betting joint venture with William Hill to take on BetMGM and claim a large portion of the estimated $30bn to $35bn US sports betting market.
William Hill owns 80 per cent of the joint venture, which it entered with Eldorado Resorts before the latter’s mega-merger with Caesars this year, running sports betting through Caesars’ market access in certain states and at Caesars’ land-based properties.
Caesars said the takeover could allow it to generate between $600m and $700m in annual revenues from online and sports betting.
Meanwhile, the US operator intends to sell William Hill’s retail branch networks in the UK and Europe. Possible buyers for the UK branches may include Paddy Power and Betfred.
Outlets in the UK were already struggling before the Covid-19 pandemic due to the impact of regulatory changes on fixed-odds betting terminals, and in August William Hill said it would permanently close 119 of its 1,500 UK branches.
Devlin said of the Caesars’ offer: “The William Hill board believes this is the best option for William Hill at an attractive price for shareholders.
“It recognises the significant progress the William Hill Group has made over the last 18 months, as well as the risk and significant investment required to maximise the US opportunity given intense competition in the US and the potential for regulatory disruption in the UK and Europe.”
Caesars Entertainment 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.
“William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to serve our customers in the fast-growing US sports betting and online market.
“We look forward to working with William Hill to support future growth in the US by providing our customers with a superior and comprehensive experience across all areas of gaming, sports betting, and entertainment.”
William Hill has a long history. Founded by Hill in 1934 when gambling was still illegal in Britain, it changed hands many times over the decades before its listing on the London Stock Exchange in 2002.
It was one of the UK’s “big four” names in gambling in the 1980s with Ladbrokes, Coral and Mecca.
Caesars owns the world-famous Caesars Palace casino in Las Vegas, as well as Circus Circus, Bally’s, Harrah’s, Planet Hollywood and the Flamingo.
It hopes to complete the takeover in the second half of 2021.