Caesar's acquires William Hill
Caesars Entertainment, a huge US gambling firm, has emerged as the victor in a takeover bid for UK bookmaker William Hill. With both Caesars and Apollo Global Management putting forward billion-dollar bids, it was clear since last week that Caesars would acquire the betting provider for approximately 3.7 billion USD. The focus is now on dominating the expanding US sports betting market.
A New Super Merger in the Gambling Industry
Since early September, Caesars and William Hill have been deepening their long-standing cooperation. At the time, the sole focus was on integrating Hill's betting business with Caesars' online gambling platform. Speculation about a joint venture or even a takeover surfaced. The latter has now been confirmed, with Caesars becoming the new owner of the London-based bookmaker in a deal worth billions.
Caesars UK Holdings has emerged triumphant from a bidding war with the New York investment giant Apollo Global Management. Caesars will pay 3.2 billion euros to acquire Hill's entire betting business. The specifics of the deal stipulate that Caesars will exchange 272 pence for each William Hill share, and a due diligence process has been completed.
Shareholder Approval Still Needed
Last week, Hill shares reached their highest point in the previous two years at 312 pence. On Wednesday, the shares were priced at 274 pence per share, indicating that the offer from Caesars (272 pence) was well-received by shareholders. William Hill CEO Roger Devlin, however, emphasized that shareholders must still approve the acquisition.
Devlin, who recommends unanimous and unconditional approval, believes it to be the best choice for shareholders. The terms of the transaction are fair and reflect the significant progress made by William Hill in the US market in the past 18 months. While the European market has been plagued by regulatory disruption, overseas offers lucrative prospects.
In the US, William Hill has expanded since the overturn of PASPA in May 2018, which legalized sports betting. The bookmaker has 170 retail sites in 13 US states due to multiple casino partnerships. It also operates an online casino in New Jersey, generating USD 510 million in revenue by July. Turnover in 2020 was triple that of sports betting, owing to the pandemic.
Advantages of the Merger
Caesars' acquisition of CG Technology and the establishment of its own betting lounge at the Capital One Arena could contribute significantly to the business's growth. Caesars' CEO Tom Reeg views the merger with William Hill as a lucrative and exciting opportunity. The integration of William Hill's expertise in sports betting will considerably enhance Caesars' broader offering. The merger will enable Caesars to cater to a vast customer base in the flourishing US market.
Caesars and Hill have been linked for some time. In July 2019, Hill signed a sports betting deal with Eldorado, the current owner of Caesars. Caesars' 20% stake in Hill's subsidiary automatically prompted the merger. Analyst Jared Shojaian of Wolfe Research values the combined operations of Caesars and Hill at around 7 billion USD.
A Flashback of Notable Historic Mergers
The merger between Caesars and William Hill is not the only remarkable merger of the last two years. In 2018, the acquisition of FanDuel by Paddy Power Betfair (PPB) made headlines. TSG, the owner of PokerStars, also acquired SkyBet for around USD 4.7 billion.
The July merger between PPB owner Flutter Entertainment and TSG was approved. Together with Caesars and Eldorado's merger, completed in July, this is the largest merger in recent gaming history, creating the world's most prominent listed gaming company.
Another significant development emerged in July. The global market leader for live dealer games, Evolution Gaming, is intending to take over Swedish game developer NetEnt. The merger is currently under review by various market regulatory authorities, who are concerned about the potential distortion of competition due to the market dominance of both companies.
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Source: www.onlinecasinosdeutschland.com
