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Fueled by the recent bullish sports wagering market, Caesars Entertainment said it’s looking more aggressively to buy long-standing British betting stalwart William Hill for approximately $3.7 billion as it also simultaneously moves to defeat a rival bid from private equity giant Apollo Global Management.
Based in Nevada, Caesars said Monday that it is in an advanced discussions stage with William Hill about a possible cash takeover worth the roughly equivalent of 2.9 billion British pounds. The announcement came only three days after William Hill disclosed it had received dueling proposals from both Caesars and Apollo.
William Hill’s board of directors has indicated to Caesars that the £2.9 billion offer “is at a price level that they would be minded recommending to William Hill shareholders,” the companies said Monday. As stated, the offer would be a 25% premium to the closing share price on Thursday, the day before William Hill said it had received an approach.
In comparison to Apollo, Caesars has a distinct competitive advantage in the William Hill pursuit. The companies have a joint sports-betting venture already formed in the U.S., in which Caesars owns 20% and William Hill 80%. This potential partnership gives William Hill valuable access to operate in states where Caesars is a licensed gambling operator. However, Caesars warned Monday that under the terms of that venture, Caesars could end those market-access rights if William Hill were acquired by Apollo.
Caesars CEO Tom Reeg said,
The opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect. William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to better serve our customers in the fast-growing US sports betting and online market.
Having been hard in 2020 by the Coronavirus pandemic, William Hill had to permanently close more than 100 of its U.K.-based wagering shops, which were already under pressure from increased regulation and the shift to online betting. The US has been a major target growth area for William Hill over the past two years since the Supreme Court’s reversal of PASPA (the Professional and Amateur Sports Protection Act) in May 2018. It has contributed 7% of the group’s total revenue during the first six months of the year.
In early September William Hill said Caesars had signed a deal with ESPN that would see its odds integrated into ESPN’s website and fantasy app in states where sports betting is legal. That deal followed a similar agreement announced in February between William Hill and Viacom CBS Inc.’s CBS Sports that enabled the gambling company to seek new customers utilizing the media giant’s huge sports customer base.
Caesars reported they have finalized due diligence and a further statement would be made when appropriate. Any confirmation of the deal is expected to close during the second half of 2021. It is uncertain whether Apollo — the massive buyout firm led by billionaire Leon Black will counter Caesars’ proposal. An Apollo spokeswoman did not immediately comment on the proposed deal on Monday.
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Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
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