William Hill, a UK sports betting powerhouse, has announced its acceptance of Caesars Entertainment’s purchase offer.
This past Monday, Caesars Entertainment offered £2.9 billion to buy out William Hill as a counter to Apollo Management’s initial buyout offer made on 26 September. The casino operator will pay William Hill 272 pence per share in cash, about 25% above the bookmaker’s share price before the purchase announcement.
In light of this purchase acceptance, Caesar’s offer did have some strings attached to it as Caesars warned that if William Hill did not go through with its offer and took Apollo Global Management’s offer instead, the casino operator will terminate key linkups with the bookmaker, dealing a massive blow to its current and future USA aspirations. The deal needs to be approved by the majority, about 75%, of the UK bookmaker’s shareholders to close the deal. With this in mind, Caesars’ offer did not leave William Hill with many choices and its board has unanimously and unconditionally recommend the transaction. If all regulatory and shareholder processes go smoothly, the deal is expected to finalise in 2021.
The casino operator has expressed interest in the UK firm’s bookmaking business as it has over 150 sites in 13 of the USA’s 52 states. On top of that, William Hill’s sports betting expertise is a goldmine for the casino operator as it seeks to combine all of its services under one brand. Initially, William Hill had entered into a joint partnership with Eldorado Entertainment last 2018. Caesars Entertainment was able to own 20% of William Hill’s shares due to its recent merger with Eldorado Entertainment through a £13.42 / $17.3 billion deal, ultimately combining various properties and partnerships under one brand. The deal has also allowed William Hill access to many iconic Las Vegas properties such as Caesars Palace and The LINQ and as well as an even larger opportunity to penetrate the US sportsbook market as it is currently the exclusive sportsbook operator of Caesars across multiple states.
Tom Reeg, Caesars’ chief executive officer has commented on this recent news saying that the opportunity to combine the company’s land-based casinos, sports betting and online gaming in the US is a truly exciting prospect. He lauded William Hill’s long-running sports betting expertise and also said that this will complement the company’s current offerings. He further went on to say that the combined group will be able to better serve its customers in the USA’s fast-growing sports betting and online gaming market. Finally, he also mentioned that this merger will fully maximize the brand’s opportunities in the sports betting and gaming sphere.
Caesars did confirm that its purchase of William Hill focuses on the bookmaker’s US operations and that it could divest the bookmaker’s UK and international operations to other interested parties.
The US Supreme Court’s lifting of the federal ban on athletic gambling in 2018 has paved the way for several states to legalize sports betting, turning the recently opened market into a goldmine for operators to flourish.