888 Holdings (LON: 888) says it is in “advanced discussions” with Caesars Entertainment Inc to acquire William Hill’s European operations. The Gibraltar-based company made the announcement in a filing to the London Stock Exchange Tuesday morning, hours after an apparently premature report in The Times that the deal was done.
The British national newspaper reported 888 had outbid its two remaining rivals in the race, private equity giant Apollo Capital Management and CVC Capital Partners, with a £2 billion US£2.76 billion offer. Other reports from last week suggested CVC had already dropped out.
888 cautioned there could be “no certainty” that discussions would result in a transaction, adding that a further announcement would be made “as and when appropriate.”
Render Unto Caesars… £2B
The Europe division has been up for sale since Caesars acquired William Hill last year in a deal worth US$3.69 billion. The Nevada-based casino giant made it clear at the time it had no interest in the assets and would seek “alternative owners” for them.
For Caesars, the real prize was the British company’s growing US ops. William Hill US was already the leading sports book operator in the Nevada market when the Supreme Court lifted the federal ban on sports betting. And it made significant inroads throughout the US afterwards as new states began to regulate.
European operations are currently more valuable than the US division, but William Hill is facing a regulatory backlash at home, while the US market is expected to go from strength to strength.
In 2019, the company was forced to close around 700 of its 2,100 retail betting outlets in the UK because of government reforms that included reductions in the maximum stakes on fixed-odds betting terminals, from £100 (US$138) to £2 (US$2.76).
William Hill shuttered 119 more outlets as the UK emerged from lockdown because it said it did not expect customers to return to pre-pandemic numbers.
Resale Value?
Unless it plans a radical departure from its core offering, online-only operator 888 is unlikely to be interested in the retail outlets, which suggests another sell-on is in the cards, should the first deal go ahead. Those outlets could go to UK bookmaker Betfred, which has expressed an interest in a deal.
Meanwhile, 888 would inherit digital operations that that span the major European gambling markets like the UK, Italy, and Spain, and netted revenues of £802.8m in 2020.
The £2 billion figure, which may not be accurate, would be higher than analysts’ estimates of the Europen assets’ value, which ranged between £1.2 billion (US$1.65 billion) and £1.7 billion (US$2.34 billion).
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