Just two months after US casino operators Eldorado Resorts and Caesars Entertainment Corp. completed their $17.3 billion tie-up to form Caesars Entertainment Inc., the enlarged group could soon get involved in another multi-billion M&A deal.
Caesars said today that it is in “advanced discussions” to buy William Hill in a possible cash deal that values the British bookmaker at £2.9 billion. Under Caesars’ offer, William Hill shareholders will receive 272 pence in cash if the deal gets done.
The casino operator noted in a statement issued today on its website that William Hill’s board of directors has told Caesars that its offer is now at a price level “that they would be minded to recommend” to shareholders.
If ongoing discussions result in a firm bid being tabled, the deal will be subject to approval of William Hill’s shareholders as well as to antitrust and regulatory approvals. Caesars said that it expects the transaction to close in the second half of 2021, if all approvals are cleared.
Caesars already owns a 20% stake in William Hill’s US business under a sports betting partnership the former Eldorado signed with the bookmaker in 2018. Under that partnership, the sports betting operator manages exclusively Caesars’ sportsbooks across multiple US states.
Caesars said today that it would be able to exercise its right to terminate its US joint venture with the bookmaker if the latter accepts a rival takeover offer from Apollo.
“A Truly Exciting Prospect”
Caesars has completed due diligence checks in relation to the potential acquisition of William Hill. The company’s CEO, Tom Reeg, said that “the opportunity to combine our land-based casinos, sports betting and online gaming in the US is a truly exciting prospect.”
News about Caesars’ offer to buy William Hill emerge amid reports that the two companies have been in talks over the potential combination of Caesars’ iGaming and betting business with William Hill US.
Mr. Reeg noted further that “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.”
Caesars and William Hill reportedly engaged in takeover talks in the fall of 2018 but these fell through over price.
A deal with Caesars will further strengthen William Hill’s US footprint where the bookmaker already operates 117 sportsbooks in 13 states where athletic gambling is legal.
In the UK, the operator has been grappling with the impact of the coronavirus pandemic on its retail bookmaking business. Its betting shops were closed for months to help curb the spread of the dangerous virus and last month the company said it had decided to close permanently 119 shops as a result of the pandemic.
Last year, William Hill was forced to close 700 retail betting locations following the UK government’s crackdown on the controversial fixed-odds betting terminals.
A combination with a larger group could provide William Hill with the finances to strengthen its overall business after the worst health panic the world has seen in many years and further grow its footprint in the US, which is becoming a key revenue driver for many European companies that have crossed the pond to pursue early entry into a potentially massive market.
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