US casino operator Caesars Entertainment has agreed to a takeover of British bookmaker William Hill for £2.9 billion.
The two gambling firms announced the deal on Wednesday (September 30th), revealing that US brick-and-mortar casino operator Caesars Entertainment will pay £2.72 per share in cash. However, the acquisition is subject to a shareholders vote as well as regulatory approval, with the deal expected to be finalised in the second half of 2021.
The news comes after US private equity group Apollo made two rival bids to take over the British bookmaker. However, Caesars Entertainment, which owns a 20% stake in the company’s US operators and has exclusive rights to operate sports betting under its brand name, warned that accepting Apollo’s offer would jeopardise their relationship.
According to The Guardian, the agreement will give Caesar’s Entertainment, which owns Caesars Palace casino in Las Vegas, access to the US sports betting market, and the gambling firm believes that the business created as a result of the acquisition could generate between $600 to $700 million in revenue in 2021 for the company.
Caesars Entertainment plans to integrate William Hill’s US businesses with minimal job cutes and plans on finding a different owner for the bookmaker’s non-US based business, including its 1,400 betting shops.
William Hills announced back in August that it would not reopen 119 of its betting shops as a result of the coronavirus shutdown, claiming that it doesn’t expect customers to return to its shops in the numbers witnessed before the pandemic.
Speaking about the acquisition, Caesars Entertainment CEO Tom Reeg said in a statement: “William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to serve our customers in the fast-growing US sports betting and online market.
“We look forward to working with William Hill to support future growth in the US by providing our customers with a superior and comprehensive experience across all areas of gaming, sports betting, and entertainment.”
Roger Devlin, the Chairman for William Hill, also commented on the acquisition, telling CasinoBeats: “The William Hill Board believes this is the best option for William Hill at an attractive price for shareholders.
“It recognises the significant progress the William Hill Group has made over the last 18 months, as well as the risk and significant investment required to maximise the US opportunity given intense competition in the US and the potential for regulatory disruption in the UK and Europe.”
Devlin continued: “William Hill is one of the world’s leading betting and gambling companies, with a long and proud heritage. It is one of the most recognised brands globally. Over recent years, it has transformed from a business once heavily reliant on UK retail into a company that is truly diversified by geography and channel, providing a stable standalone platform for future growth.
“For now, it is very much business as usual. Employees will be kept fully informed through this process. In terms of our UK and international businesses, we believe they have a strong future ahead, and we will work with Caesars to find suitable partners to further the long-term growth prospects of these businesses.”
Sports betting across most of the United States was illegal until the Supreme Court overturned a federal ban in 2018, allowing states to decide whether or not they want to legalise gambling and sports betting.
Since the ban was overturned, states such as New York, New Jersey, Colorado, Delaware, Washington, D.C., Illinois, Indiana, Iowa, Michigan, Mississippi, Montana, New Hampshire, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Tennessee, Virginia, Washington, and West Virginia have legalised sports betting.
Shortly after Caesars Entertainment announced its agreement to the acquisition, online casino operator 888 announced its interest in purchasing William Hill’s European-based business if sold as part of the acquisition.
The purchase could include William Hill’s UK betting shops as well as the company’s online casino operations across countries such as Sweden, Italy, Spin, and the United Kingdom, the Financial Times reports.
Itai Pazner, the Chief Executive at 888, said the company was “in a good position to make acquisitions” before adding: “We are going to look at any asset that can be relevant for us, and within that list, if that opportunity [to buy William Hill’s assets] comes our way, that could be relevant for us.”
The news comes after 888, which owns the popular 888 Casino, revealed on Wednesday that its pre-tax profits had risen 130% to $50.9 million in the first six months of 2020 compared to the same period from last year. In addition, 888 revealed that its revenue had increased by 37% to $379 million over the same period.
As a result of its continued success, the company is planning on delivering additional online products, including new poker and a sports betting service, expanding its services to attract more customers and retain existing users.
Pazner explained: “888 is looking forward to delivering further product enhancements including the introduction of our new poker product across markets during H2 2020 and the launch of our proprietary sportsbook in the UK early next year.
“In addition, we are continuing to invest in safe gambling tools and will begin the roll-out of a new customer-centric safe gambling feature called the ‘Control Centre’ later this year that will offer customers an improved interface to help them understand better their gambling behaviour.”
He added: “As a result of the group’s continue momentum, as well as its strengths as a product-centric, responsible and diversified operator, the board believes that 888 has a unique platform to deliver continued strategic progress during H2 and beyond.”