Gambling operators William Hill and Amaya announced today that they have scrapped plans for a £5-billion merger that would have created another industry powerhouse with omni-channel offering and presence in multiple regulated and unregulated jurisdictions.
The announcement comes shortly after William Hill’s biggest investor Parvus Asset Management Europe Ltd. came strongly against the deal, arguing that there was no strategic logic behind it and that shareholders in the UK gambling operator would have suffered from it.
William Hill said in a statement from earlier today that after talks with investors, the Board has canvassed the opinions received and has decided that a merger with Amaya would not be in the company and its shareholders’ best interest.
In a separate statement, Amaya’s Board pointed out that members have concluded that the company maintaining its current status of an independent publicly-traded one would place it in a good position for a long-term growth, which would, in turn, maximize shareholder value.
It seems that former Amaya CEO, David Baazov, is still interested in buying the company. It was announced in February that Mr. Baazov had notified the Board that he would make an offer for buying the Canada-listed online gambling operator, which is best known for being the owner of PokerStars. However, the former Chief Executive has not made an official offer so far.
With the introduction of stricter gambling regulations and additional taxes in the UK and around Europe and the rapid growth of the online gambling industry, operators with long-standing retail traditions like William Hill have faced difficulties in adapting to the new environment. This has resulted in big industry players merging operations in a bid to improve performance and opportunities for customers acquisition and retention.
As it seems, William Hill and Amaya had mulled potential merger for weeks, which comes as a clear indication that the UK gambling operator has been engulfed by the wave of industry consolidation unleashed by some of its biggest rivals. Given the fact that some of the big names within the gambling industry have already combined their operations, it would probably be a bit difficult for the owner of UK’s largest betting shops chain to find an equal to merge with.
William Hill said in today’s statement that the group is still pursuing improvement in four main areas set out by Interim CEO Philip Bowcock, with those being the company’s online and international businesses, as well as technology and efficiencies. Mr. Bowcock took the operator’s reigns in July when former Chief Executive James Henderson announced his departure after two years at the helm.
Apart from those four core areas, William Hill will also remain on the alert for opportunities for increasing share holder value, the company pointed out. Parvus co-founder Mads Eg Gensmann suggested last week that William Hill’s Board consider sale options, as well, if need be.
The UK gambling operator was at the center of merger and acquisition talks two times within a very short period of time. In August, William Hill was approached by rivals The Rank Group and 888 Holdings but the operator dismissed its suitors, arguing that it could not engage in a deal based on “risk, debt, and hope.”
