| Deal is
unanimously recommended by UK bookmakers directors
The US casino operator Caesars Entertainment has agreed a
£2.9bn takeover of the British bookmaker William Hill.
companies announced on Wednesday that Caesars would pay £2.72 per William
Hill share in cash, a premium of more than a quarter compared with the price
before the US companys interest was first reported last week.
IThe deal, which must be agreed by 75% of William Hill shareholders,
was unanimously recommended by the UK companys directors. It came after
two rival bids by the US private equity group Apollo were turned down.
The takeover will give Caesars, the operator of the Caesars Palace
casino in Las Vegas, access to the burgeoning US sports betting market. Caesars
also owns various casinos in the UK.
Sports betting was illegal across
the vast majority of US states until a 2018 supreme court decision overturned a
federal ban, firing the starting gun on a race between bookmakers to target one
of the worlds biggest potential markets.
The size of the online
opportunity has given US betting companies a lifeline during the coronavirus
pandemic, with the value of shares in Caesars surging from lows of almost $6 in
the March panic to $54 on Tuesday evening. Caesars previously said the takeover
could allow it to make between $600m and $700m in revenues next year in online
and sports betting.
Roger Devlin, William Hills chairman, said
the offer was at an attractive price for shareholders but added
that it reflected the risk and significant investment required to
maximise the US opportunity, given intense competition in the US and the
potential for regulatory disruption in the UK and Europe.
it would be very much business as usual for William Hill workers
for now. Caesars plans to sell William Hills UK and European branch
networks, which have struggled before and during the pandemic under increased
regulatory pressure to tackle problem gambling. William Hill announced the
closure of 119 UK branches in August.
Tom Reeg, the chief executive of
Caesars, said: William Hills 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
Caesars, founded in Reno, Nevada, in 1937, is one of the
largest casino operators in the US and employed 80,000 people at the end of
2019. Its venues are run under the brands Caesars, Harrahs, Horseshoe and
Eldorado. It is best known for running the Caesars Palace hotel on the Las
Vegas strip, famed for hosting performers such as Frank Sinatra, Judy Garland
and Elton John, as well as top boxing matches.
Like its UK rivals,
William Hill is expanding in the US market, where the supreme court reversed a
decades-old ban on sports betting in 2018. It has been struggling in the UK and
recorded pre-tax losses in 2018 and 2019 after curbs on fixed-odds betting
terminals were introduced.
The company has also been hit by the
coronavirus pandemic. The cancellation of big sports events around the world
initially led to a big drop in betting activity but the return of sporting
competition such as Premier League football on 17 June meant much of the
revenue affected by lockdown was delayed rather than lost.
decided not to reopen 119 branches closed during the coronavirus lockdown but
few redundancies were expected as the majority of staff were redeployed. It is
left with 1,414 UK branches and employs 12,500 people worldwide, including
8,000 in the UK.