In a late night announcement, Caesars Entertainment has confirmed they’ve reached a deal to buy William Hill. The £2.9 billion ($3.7 billion) takeover was announced in a Tuesday night press release, with the deal set to conclude in the second half of 2021.
The companies have agreed to a buyout at £2.72 per share, That’s exactly the price they had confirmed when they earlier admitted to the attempted takeover, and just under Hills’ current trading price of £2.74.
The deal must now be agreed to by 75% of William Hill shareholders. Two rival bids by Apollo Global Management were turned down before Caesars made their winning bid.
Caesars Entertainment CEO Tom Reeg stated:
“The opportunity to combine our land based-casinos, sports betting and online gaming in the U.S. is a truly exciting prospect. William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to serve our customers in the fast-growing U.S. sports betting and online market. We look forward to working with William Hill to support future growth in the U.S. by providing our customers with a superior and comprehensive experience across all areas of gaming, sports betting, and entertainment.”
Roger Devlin, Chairman of William Hill, commented on why this was the best offer they had seen:
“The William Hill Board believes this is the best option for William Hill at an attractive price for shareholders.” It recognizes the significant progress the William Hill Group has made over the last 18 months, as well as the risk and significant investment required to maximize the U.S. opportunity given intense competition in the U.S. and the potential for regulatory disruption in the U.K. and Europe.”
Caesars goes on to break down the rationale for the buyout, with the growing U.S. sports betting industry chief among them. They expect to grab a big portion of the estimated $30-35 billion market, and want to use the deal to broaden the scope of projects the two companies had already been working on.
With ongoing brick and mortar projects, and new possibilities from online betting made possible by the deal, Caesars’ stated they expect “that the enlarged sports and online gaming business in the U.S. could generate between US$600-US$700 million in net revenue in FY2021 (on a pro-forma basis).”
Not everyone is excited about this deal. Our Rafi Farber recently wrote that this looks like a terrible deal from his perspective. Capital about to quickly drain out of the British economy, and Caesars could be chasing a sports betting dream that won’t pay off for them. On the other side, William Hill looks to be taking the easy way out just when things looked like they could be turning around.