William Hill and GVC Holdings have tabled their formal offer to acquire Sportingbet PLC, which, if accepted by shareholders, would bring a three-month courtship to an end. The £485m bid consists of 86% in cash from Hills and 14% in GVC shares and values Sportingbet at 56.1p per share; the same terms as the conditional agreement the parties reached earlier this month. Hills would get Sportingbet’s lucrative Australian operations (including Centrebet) and a call option on Sportingbet’s Spanish-facing Miapuesta business, while GVC will content itself with Sportingbet’s grey market operations. Hills CEO Ralph Topping told analysts his company craves “more international revenues” and that he has “had my eye on Australia for a while.” Topping described Sportingbet’s Australian mix of sports betting, mobile wagering and an enthusiastic betting population as a “sweet spot for us.”
But hold the phone. Shortly after the offer was made public, online gaming software outfit Playtech released a statement that may throw a spanner into the works. Playtech, which holds a 29% stake in the William Hill Online (WHO) joint venture, says that if Sportingbet accepts the Hills/GVC offer, Hills “will be obliged to offer to sell the remote gambling activities of Sportingbet” to WHO “within six months” of the acquisition being completed. Playtech further asserts that it “has the right, in its absolute discretion, to determine whether WHO proceeds with the acquisition.” Playtech expects “the potential contribution of [Sportingbet’s online operations] and associated synergies and cost savings will be taken into consideration as part of any valuation” of WHO.
The WHO valuation is critical because the often acrimonious JV partners are in the process of going their separate ways, and Playtech is currently debating how much their pound of WHO’s flesh is worth to Hills. That amount must be determined by late February 2013, after which Hills would have until the end of April to fish or cut bait. Playtech notes that “there can be no certainty” that Hills will proceed with the buyout. Not for nothing did Topping complain about Playtech’s “strategic veto” in the JV back in February, and Topping reportedly had issues with Playtech founder Teddy Sagi, who was sentenced to nine months in an Israeli prison in the 1990s after admitting to bribery, fraud and stock manipulation in the so-called ‘Discount Affair’ scandal.
Sportingbet, meanwhile, faced a mini-revolt at its annual general meeting on Wednesday. Nearly 22% of shareholders voted against the company’s remuneration report, a steep rise on the 13.9% that objected to the executive pay packets last year. Raising shareholders’ ire is the £2.4m severance package CEO Andrew McIver is set to earn once the Hills/GVC takeover is complete. Apart from bonuses, pension payouts and the like, McIver’s golden handshake would include two years worth of salary, twice that recommended under the UK corporate governance code. Finance director Jim Wilkinson is also in line for a double-dip salary sendoff.