Caesars Palace-owner in £2.9bn takeover bid for William Hill
Caesars Entertainment, the Las Vegas casino-owner and live betting giant, has today begun a £2.9bn takeover of British bookmaker William Hill.
William Hill has also received a takeover approach from US private equity firm Apollo – although further details regarding this bid have not been revealed. Also, Caesars Entertainment announced that if William Hill were chose Apollo, it would jeopardise a joint venture between the companies.
Caesars Entertainment already owns a 20% stake in William Hill’s US operations, which also have exclusive rights to operate sports betting under the Caesars brand. William Hill’s US bookmaking business currently has more than 150 retail sites across 13 American states.
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 better serve our customers in the fast growing US sports betting and online market.”
William Hill’s share price rose by 42% to 312p following the takeover approach.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: ‘’Caesars Entertainment is taking a big bet that this takeover will help it create a mega gambling and gaming group, combining its huge land based casinos with William Hill’s market leading and rapidly expanding share in the US sports betting market.
“The shares have dipped as detail of the deal were released today, but they had jumped by a third on Friday when it seemed William Hill could be subject to a bidding war, with alternative asset manager Apollo also interested.
“William Hill’s board has now indicated to Caesars that they would be minded to recommend a £2.9bn cash offer, at what the company describes as a ‘compelling price.’ The deal would see William Hill shareholders receive 272p per share, a 25% premium to the closing price on September 24th, prior to any announcements.
“Although William Hill’s online proposition lags behind some of its rivals, it’s been focused on the US for some time and boasts a 29% share of the US sports betting market. Caesar’s clearly sees vast potential for online betting, given the entertainment giant’s extensive relationship with dozens of big US sports teams.
“The pandemic severely disrupted large sports fixtures, and the closure of betting shops during lockdown had a severe effect on William Hill’s revenues in the first six months of the year. However, the deal, if it’s approved, isn’t expected to close until the second half of 2021 at a time when the sporting calendar on both sides of the Atlantic is expected to be back in full swing.’’