- Legal States
Fiona Simmons September 27, 2020 3 min read
William Hill at the Centre of a Potential US Bidding War
UK betting giant William Hill issued a response to speculation Friday, confirming the operator received two separate cash offers, from Apollo Management International LLP and its subsidiaries, and from Caesars Entertainment, Inc.
After an initial written proposal from the US private equity group Apollo in August, William Hill received a further proposal and proposals from casino and hospitality operator Caesars. The sportsbook provider outlined that,
“there can be no certainty that any offer for William Hill will be made, nor as to the terms on which any offer might be made”,
as discussions with the respective parties are ongoing. However, according to the City Code on Takeovers and Mergers, Rule 2.6(a), both interested parties have 28 days to either announce a firm intention to make an offer or announce they do not intend to make an offer. The October 23 deadline may be subdued to extension in accordance with Rule 2.6(c), with the consent of the Panel on Takeovers and Mergers.
William Hill published this release without prior agreement from both Apollo and Caesars and, if and when appropriate, the bookmaker will make a further announcement.
Despite the lack of any certainty, speculation William Hill was at the center of a potential bidding war from US companies resulted in its share price skyrocket 33% for the day. By the end of Friday close, the FTSE 250-traded company which broke above the 300p mark during day trading fell slightly to 286p.
According to an unnamed senior banker, US private equity firms have been looking to buy UK-listed companies due to the slump in their prices in March and April, with a particular interest in the £1 billion to £5 billion range.
Apollo, which allegedly manages in excess of the equivalent of £315 ($400) billion of assets, is also a strong candidate to buy UK supermarket chain ASDA, in a deal worth around £6.5 billion. Apollo had a period in its history of owning Caesars Palace, having acquired its owner Harrah’s Entertainment in 2006.
The other potential candidate for William Hill, Caesars Entertainment, already has a 20% stake in the bookmaker, after the completion of Caesars and Eldorado Resorts $17.3 billion merger, as previously, William Hill signed a deal with Reno-based Eldorado to have the right to offer sports betting in all of the operator’s casinos, in states where betting on sports is legal.
William Hill was among the most affected sports betting operators by the coronavirus health crisis and the halt on sporting events, and in August, the operator confirmed it would permanently close down 119 street shops and would merge retail and online operations.