888 Holdings rejects Playtech's $890 million takeover bid
William Hill owner 888 Holdings Plc (OTC: EIHDF ) reportedly rejected a nearly $890 million takeover bid from Playtech (OTC: PYTCF ) in July.
The Sunday Times reported, citing unnamed sources, that 888 and Playtech discussed a deal in July in which the acquirer could merge the target with its Italian bookmaker Snai and then spin off its B2B arm, raising concerns .
If the reports are true, it confirms that 888 is very busy this summer. Last month, news broke that DraftKings (NASDAQ: DKNG ) was in acquisition talks with its parent company, William Hill, at some point over the summer. DraftKings is said to be considering a full stock acquisition of 888, which has long been considered a takeover target.
DraftKings reportedly broke off talks with 888 shortly after FS Gaming Investments, an investment group led by former GVC CEO Kenny Alexander, announced it was acquiring a 6.57% stake in 888. Alexander's move sparked regulatory concerns, with the UK Gambling Commission (GBGC) announcing that William Hill's license was under review due to the allegedly questionable manner in which GVC divested a Turkish company under Alexander's leadership.
888 It might be wise to accept the deal
Playtech's offer target for 888 is $889.65 million based on current GBP/USD exchange rates.
888 might be wise to accept the offer, as the gaming company's market capitalization has fallen to $381.28 million. The decrease is due to the operator paying $765 million to Caesars Entertainment Inc. (NASDAQ: CZR ) in 2022 for William Hill's international operations.
888 and Playtech have partnered with the latter to operate internet casino games on its platform. Last year, the parties expanded the agreement to include the fast-growing U.S. iGaming market.
"This agreement will improve the overall gaming experience by delivering more entertaining and dynamic games as part of our content and product leadership strategy," 888 US division president Howard Mittman said in a statement at the time. "We look forward to welcoming Playtech's content and expanding our partnership together."
Chapter 888 Try to walk alone
While 888 has long been the subject of takeover speculation, with some rivals apparently expressing interest in acquiring the company, the operator's management appears intent on surviving on its own, at least for now.
The gaming company's debt-to-capital ratio has soared, with outstanding liabilities reaching $3.55 billion as of 2022. Still, the company doesn't have to deal with debt maturities until 2027, suggesting it has some breathing room and doesn't need to sell in the short term just to get rid of debt.
On the other hand, William Hill 888's low market capitalization and strong brand recognition among European bettors may force other suitors to make takeover offers.
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Source: www.casino.org
