Two bidders have tabled rival cash proposals for British bookmaker William Hill fueling chatter that the company could get involved in some form of consolidation in the coming months.
William Hill said Friday that it has received proposals from casino giant Caesars Entertainment Inc. and private equity firm Apollo Management International and discussions with the two parties are ongoing.
The British bookmaker further noted in a statement to the stock exchange that it first received an initial written proposal from Apollo on August 27, 2020, and then received a further proposal from the investment firm and separate proposals from Caesars.
News about Caesars mulling an offer to take over William Hill emerge amid reports that the two companies are in talks to form a 50-50 partnership and combine the casino operator’s online gaming and sports betting operations with William Hill’s US wagering arm.
The bookmaker said in its Friday statement that “discussions between William Hill and the respective parties are ongoing” and that “there can be no certainty that any offer for William Hill will be made, nor as to the terms on which any offer might be made.”
The company said that its suitors have until October 23, to make a firm offer under UK takeover rules.
This is not the first time William Hill and Caesars have engaged in takeover talks. The two companies reportedly held detailed discussions in the fall of 2018 about a cash and shares deal that would have seen the British bookmaker join the former Caesars. Consolidation talks eventually fell through over price.
Acquisition Talks Amid US Expansion
William Hill has not been doing great in its domestic market. The company closed hundred of betting shops after the maximum stake on fixed-odds betting terminals was cut from £100 to £2 last year. In addition, the coronavirus pandemic forced William Hill to shutter all of its shops around the UK for months.
The company said that 119 of its shops would not resume operations as it did not expect betting volumes to recover to pre-pandemic numbers anytime soon.
However, William Hill has been on a heavy expansion spree in the US where it has 170 retail wagering sites in 13 different states. Under a partnership with former casino operator Eldorado Resorts and after that company’s merger with Caesars Entertainment Corp. in July, the British bookmaker now runs Caesars’ sportsbooks around the US.
The partnership provided William Hill with access to iconic Las Vegas Strip properties such as Caesars Palace, The LINQ, Paris, and more.
Apollo, the other suitor potentially bidding for William Hill, is a US buyout firm that claims to have more than $400 billion worth of assets under management. It should be noted that Apollo and fellow private equity firm TPG Capital were involved in a 2008 leveraged buyout of the old Caesars that ultimately led the casino operator to file for bankruptcy in 2015.
Chatter about William Hill being lined up as a takeover target in the US emerge after activist hedge fund HG Vora Capital Management bought a 5.1% stake in the British bookmaker for a reported £115 million.
That transaction stoked speculation that the investor could push for a sale of the gambling company. HG Vora previously invested in several gambling companies, each time pressing them to engage in M&A talks.
In 2018, the hedge fund took a stake in Caesars and pushed it to explore different options for its future, including a sale. A few years ago, HG Vora built stakes in both Penn National Gaming and Pinnacle Entertainment. The two companies closed their merger in the fall of 2018.
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