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Plenty in play as William Hill board accepts Caesars' £2.9bn swoop

Oliver Gill
·3-min read
Caesars
Caesars

Las Vegas casino titan Caesars Entertainment is rushing to woo William Hill shareholders with a charm offensive after the board of the British bookmaker backed a £2.9bn takeover by the US firm.

Caesars is expected to hold a frantic round of calls with major investors in the firm as it seeks to lock in support and block a rival bidder from emerging.

William Hill chairman Roger Devlin said that Caesars' 272p-a-share approach represents an “attractive price” and is the “best option” for shareholders.

But only 0.2pc of investors are formally backing the deal, and Caesars management - led by Tom Reeg, a former managing director at insurance firm AIG - is now hoping to rapidly increase support. Caesars will ultimately have to secure the backing of a majority of shareholders to get its way.

It comes amid growing speculation over the future ownership of William Hill’s operations outside of the US, including its around 1,400 betting shops.

Caesars said on Monday that it would be looking to sell off William Hill’s operations in the UK and Europe to a third party if the takeover is successful, focusing instead on growing the firm's 29pc share of America's booming sports betting market.

Itai Pazner, boss of listed rival 888 Holdings, fuelled speculation of a possible swoop on William Hill's European arm after saying his firm would “look at and appraise any assets that can be relevant for us”.

He declined to comment on William Hill specifically, but added: “M&A is part of our growth strategy and we will consider all opportunities that will add value to shareholders." 

Although 888 has managed to bolt on a number of smaller gambling brands in the past few years, it remains battle-scarred from missing out on a takeover of European online gambling firm Bwin in 2015.

After agreeing a deal to acquire the firm, 888 was later pipped by then Aim-listed betting business GVC - the operator that went on to buy Ladbrokes and Coral and has grown to be the UK’s second-biggest firm behind Paddy Power owner Flutter Entertainment.

William Hill investors will now also be waiting for an update from Apollo Global Management, which lodged a rival bid of the UK bookmaker last Friday, sparking hopes of a bidding war. 

The Wall Street private equity firm initially approached William Hill at the end of August. Although no details of its offer have been made public, it remains to be seen whether Apollo will attempt to gazump Caesars' bid. 

Like Caesars, Apollo also sees the US as the key to William Hill’s future success. 

Caesars already has a joint venture agreement with the UK bookmaker, which it threatened to terminate if William Hill decided to accept Apollo's proposal.

Even if Apollo decides to withdraw from the running, Caesars may be forced to sweeten the deal. Hedge funds Greenvale, Hein Park and HG Vora have increased their stakes in William Hill, raising the prospect that they could hold out for a better price. 

James Wheatcroft, an analyst at stockbroker Jefferies said: “We still believe that William Hill is worth significantly more than the 272p Caesars bid.”

He pointed that the 0.2pc shareholder support had come from stakes owned by board members 

Mr Wheatcroft said: “There is the suggestion that shareholders are hoping for a 'bump’."