American casino giants Caesars has detailed a potential cash bid for British bookmaking firm William Hill.
Caesars Entertainment Inc. says that a deal worth some £2.9billion, or $3.7billion, could be forthcoming with shares in what is one of Britain’s oldest and most popular gambling brands valued at 272.0 pence.
Due diligence has been completed in advance of the deal, and an official announcement could be forthcoming.
Approvals Required for Takeover
A formal offer for the William Hill shares by Caesars will have to be approved by the company’s shareholders, although Hills’ board of directors has pointed out already that the current proposal means they would be inclined to recommend the offer be accepted.
Any bid would also require customary antitrust and regulatory gaming approval. However, Caesars for their part have said they expect that such approvals would be complete in time for the second half of next year.
Caesars and Apollo Involved in Takeover Bids
Caesars’ idea is to combine their own land-based casinos, famous of course in places such as Las Vegas, along with their sports betting and online gaming in the States with William Hill’s renowned sports betting expertise.
This offer comes after the revelation recently that both investors Apollo Global Management and Caesars had suggested separate cash bids to take over William Hill. Hills did confirm in August that they had received proposals from Apollo before a further bid from Caesars.
Caesars has now addressed this point in the official statement regarding its own bid, agreeing that should Apollo acquire William Hill then it would have no choice but to terminate any rights associated with the venture it shares with William Hill in the USA.
Via their joint venture, Hills currently runs online sports betting operations via Caesars’ market access state by state, as well as any retail sports betting (sportsbooks) in Caesars’ properties.
Going into Business Together, or Cutting Ties?
As of now, Caesars has a 20% equity ownership in their joint venture to William Hill’s 80%. Any buy-out by Apollo would mean Caesars would terminate all mobile access rights as well as permissions to operate sportsbooks at Caesars’ premises.
But, should Caesars success with their own offer then they apparently would look to widen the scope of this venture to maximise the ever-increasing sports betting opportunities in the States.
To this end, Caesars’ spokespeople have spoken out recently to say that they believe this acquisition could provide great benefits. A combined business would, they say, better serve their existing customers in America as well as provide an increase to its markets and give a more unified player experience by consolidating applications and wallets.
As well as this, Caesars has moved to say that a combined business would prove to have a “world class” portfolio of assets.
Media Rights Key to Success
Already, Caesars has some high-value, multi-year relationships with the likes of ESPN, a major media player. In turn, William Hill has its own deal with CBS. The combination it seems would allow for better alignment between the deals.
Such media rights are key to success in the casino, gaming and sports betting industries, at least in the States via live sports games. While in Britain gambling-related advertising may well be coming to an end soon, such combined deals are still majorly important across the pond.
This deal would also lead to William Hill gaining full access to the Caesars loyalty scheme, benefitting everyone. We will watch with great interest over the coming months.