Reportedly, DraftKings approached 888 investors for a possible takeover.
Frontrunner sportsbook operator DraftKings (NASDAQ: DKNG) was reported to have explored talks with stakeholders of 888 Holdings Plc (OTC: EIHDF), the company behind William Hill, during the summer.
According to anonymous sources privy to the situation, this DraftKings-led dialogue involved the possible takeover of 888 through a stock swap. William Hill has been a potential acquisition target for quite a while, and these discussions were performance-enhanced following DraftKings' September acquisition of the global William Hill business from Caesars Entertainment (NASDAQ: CZR). The prestige of the William Hill brand in the sports wagering industry was increased with this acquisition.
While neither party confirmed the existence of these negotiations, a DraftKings spokesperson highlighted that they engage in conversations with a range of companies in the normal course of business. The company's focus remains on the substantial market opportunity in the United States.
In terms of size among US-based online sportsbook operators, DraftKings ranks second, but has recently outstripped FanDuel's revenue figures in monthly earnings, courtesy of an expansion into the iGaming sector after acquiring Golden Nugget Online Gaming (GNOG).
Taking a glance at the timing
The Financial Times disclosed that the initial discussions between DraftKings and 888's stakeholders occurred in June and July. During this window, FS Gaming Investments, under the aegis of former GVC CEO Kenny Alexander, purchased a 6.57% stake in 888. FS Gaming had reportedly been a participant in the potential takeover of 888, but their interests were dampened after the British Gambling Commission (GBGC) announced that it would review William Hill's license. This review was prompted by concerns over the sale by GVC of their Turkish business under Alexander's leadership.
While Alexander originally presented a board appointment proposal where he would serve as CEO and brought in Stephen Morana as finance director while nominating replacement Executive Chairman Lee Feldman, the regulatory scrutiny led to the halt of these conversations. Alexander's future intentions with regards to a potential DraftKings acquisition are unclear given his current allegiance to Entain Plc (OTC: GMVHY), the successor entity to GVC.
History in acquisition attempts - DraftKings and Entain
DraftKings has a history of attempting acquisitions in the European gaming sector. In September 2021, they tabled a $20 billion offer for Entain, which was rebuffed by the latter. DraftKings, however, returned with a more attractive $22.4 billion combination of cash and stock offer.
These negotiations failed to materialize and it was speculated that DraftKings' motives were to drive up the price of Entain for other interested companies.
DraftKings' bid for 888 has evoked memories of their front-runner status in negotiating with European companies. One of the top 10 888 shareholders confirmed that they would have accorded a DraftKings proposal a serious consideration and would have listened to their pitch.
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Source: www.casino.org
