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Caesars Entertainment in “Advanced Talks” to Acquire William Hill for ￡2.9bn

  • US private equity firm Apollo Management has also made a takeover approach
  • Caesars Entertainment currently owns a 20% stake in William Hill’s US business
  • Caesars made an offer of ￡2.72 ($3.50) per share, valuing the total deal at 2.9bn ($3.73m)
  • It would be the third major takeover deal in the gambling industry in the past year
Andrew O’Malley

William Hill storefront
Caesars Entertainment is said to be in advanced talks with William Hill about a possible ￡2.9bn ($3.73bn) takeover. [Image: Shutterstock.com]

A potential major deal

Caesars Entertainment says that it is currently in advanced takeover talks with British sports betting operator William Hill in a deal that could be worth ￡2.9bn ($3.73bn).

Caesars has a 20% stake in the US operations of William Hill

US private equity firm Apollo Management has also made an approach to William Hill, actually doing so before Caesars’ first offer. Caesars stated that if William Hill goes with Apollo, it would put their US joint venture in jeopardy. Currently, Caesars has a 20% stake in the US operations of William Hill, with the betting operator having the exclusive rights to operate Caesars’ sportsbooks.?

Caesars has a particular interest in William Hill’s 170 retail sportsbooks across 13 states. 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.”

Specifics of a possible deal

William Hill originally announced on Friday that it had been approached with two takeover offers, after which its share price rose over 40%. Caesars has since revealed that its offer is ￡2.72 ($3.50) per share, almost 58% more than William Hill’s stock price the day before the offer was originally made on September 2.?

The William Hill board said that the “possible cash offer is at a price level that they would be minded to recommend to William Hill shareholders.” If the offer is accepted, shareholders are in favor of the takeover, and the anti-competition bodies give the deal their approval, Caesars expects the deal to be completed during the second half of 2021.

In order to fund the takeover, Caesars stated that it is raising equity and will also take out $2bn worth of new debt, secured against the non-US businesses of William Hill.

There has been no indication as to how much Apollo is offering. It did make a written cash offer to William Hill on August 27 and made another offer shortly thereafter. As per UK law, both companies must make formal offers by October 23.

Latest potential major takeover

There have been a number of recent major acquisition deals in the gambling industry. In May, Flutter Entertainment and the Stars Group completed a merger in a deal valued at about $13bn.?

The combination made Flutter Entertainment the largest online gambling business in the world, bringing together such popular gambling brands as Paddy Power, Betfair, and FanDuel with PokerStars and Sky Betting and Gaming.

In July, Eldorado Resorts acquired Caesars Entertainment in a deal valued at $17.3bn. It took a bit more than a year for the deal to close, first announced in June 2019. The newly formed company retained the Caesars name and is now the biggest casino group in the US with 52 properties.

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