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By Pushkala Aripaka and Yadarisa Shabong
(Reuters) -Bookmaker William Hill moved closer to being taken over by Caesars Entertainment on Tuesday, saying it had gained approval in a British court for the 2.9 billion pound ($4 billion) deal, which was opposed by minority shareholder HBK.
William Hill shares fell more than 2% to 271.9 pence at 1208 GMT after the bookmaker said in a statement that the so-called scheme of arrangement for the deal was likely to become effective on Thursday after it was permitted by the court.
This approval followed a hearing last month, William Hill, which operates around 1,400 betting shops in Britain, added.
HBK had opposed the scheme of arrangement for the deal, which was agreed in September with Las Vegas-based casino operator Caesars, saying the terms of an existing joint venture between the two firms were not adequately disclosed.
It argued that shareholders had voted on the scheme without the information they needed to judge the merits of the takeover.
William Hill had rejected HBK's allegation, saying it was confident that the document gave all the necessary information.
"The hope was that if the courts sided with these hedge funds, Caesars may be forced to improve its offers," Third Bridge analyst Harry Barnick said.
Private equity group Apollo had also approached William Hill about a takeover, but later backed out. Caesars had threatened to terminate its joint venture if the deal failed, making it unlikely that any other bidders would emerge.
American gambling firms have been tapping into the expertise of British rivals in recent months as sports betting has taken off in the United States during the coronavirus crisis.
Last month, Gamesys agreed to a possible takeover by Bally's Corp in a deal valued at 2.02 billion pounds.
($1 = 0.7293 pounds)
(Reporting by Pushkala Aripaka and Yadarisa Shabong in Bengaluru; Editing by Vinay Dwivedi and Alexander Smith)