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William Hill's US business under threat if Caesars loses takeover battle

Oliver Gill
·3-min read
William Hill
William Hill

Las Vegas casino operator Caesars Entertainment has threatened to abandon a key US joint venture with William Hill if it loses a battle to buy the British bookmaker.

Tabling a £2.9bn takeover offer, Caesars said that a rival bid by Apollo Global Management jeopardises William Hill’s plans for expansion in America by putting the existing partnership at risk.

The casino brand also hinted that if it wins the race, bosses could sell William Hill's UK operations including around 1,400 betting shops.

Caesars and Apollo tabled competing bids for the FTSE 250 bookmaker in a shock move on Friday. They are seeking to cash in on William Hill's position in the fast-growing US sports betting market, which took off following a landmark Supreme Court ruling two years ago and is expected to become the largest in the world.

On Monday, Caesars revealed that it has offered to buy William Hill for 272p per share - valuing the company at £3.9bn.

The joint venture between Caesars and William Hill has helped the bookie secure a 29pc share of the US market. Caesars said that it has the right to terminate this tie-up if William Hill is acquired by Apollo.

UK bookmakers have made great strides in the US, building on many years of experience in sports wagering. Most, such as Ladbrokes owner GVC and Paddy Power backer Flutter Entertainments, have chosen to work with an established US player as this is seen as crucial to success across the Atlantic.

The threat of a termination of the agreement could leave Apollo facing an uphill struggle to convince William Hill’s board, led by chairman Roger Devlin, of the merits of its approach.

Sources close to Apollo expressed surprise at Caesar’s warning alongside a statement from the William Hill board that the approach “is at a price level that they would be minded to recommend to William Hill shareholders”.

Tom Reeg, chief executive of Caesars, said: "The opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect. William Hill's 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 market.

“We look forward to working with William Hill to support future growth in the US by providing our customers with a superior and comprehensive experience across all areas of gaming, sports betting, and entertainment."

The firm also suggested it could offload all operations outside the US as it chases growth at home.  It said: "Caesars' strategic focus remains on the opportunities immediately evident in the US market at this stage.

"It believes in the compelling proposition that William Hill's presence in the UK and other non-US international markets offers to their gaming customers.

"Caesars' intention is to seek suitable partners or owners who have aligned objectives and approaches and who will be focussed on the longer term ambitions of those businesses and for the benefit of its customers."

Shares surged to 312p at the close of play on Friday following the takeover speculation but shed almost 12pc on Monday to 275.9p.