Caesars gearing up to buy William Hill with stock sale

  • Caesars is getting ready to potentially acquire William Hill PC at $3.7 billion.
  • Last week, William Hill admitted receiving two cash proposals from Caesars and Apollo Management Inc.
  • Caesars currently owns a 20% stake in William Hill, thanks to a joint venture agreement.
  • The news has generated mixed reactions among analysts, with some feeling that a three-party deal between the companies would be the best-case scenario.  

Sports betting company William Hill PLC could soon belong to Caesars Entertainment Inc. The Las Vegas-based giant gaming company is getting ready for the acquisition.

Caesars Entertainment has proposed to purchase London-based William Hill for $3.7 billion. Securities and Exchange Commission documents filed on Monday revealed that the buyer is planning to sell 30 million company shares “for general corporate purposes,” one of which is to fund a portion of the potential acquisition.

The filings said that the public stock sale includes a 30-day option for 4.5 million shares, and is not dependent on purchasing William Hill or vice versa.

William Hill didn’t give details on the potential takeover bids

William Hill admitted last week that Caesars Entertainment and another company, Apollo Management Inc., had made cash proposals to acquire the London-based sports gaming company. Although William Hill didn’t give details on the potential takeover bids, it disclosed that Caesars and Apollo have until October 28 to announce whether they will make a formal company offer.

The William Hill board announced Friday that discussions between the company and the interested parties were going on. “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,” the board added.

The proposals come at a time when legalized sports betting is spreading across the US and the coronavirus pandemic has caused online gaming to thrive.

A joint venture agreement has allowed Caesars to currently own a 20% stake in William Hill, a company that runs 29 sportsbooks at Caesars properties in seven states in the country, the documents revealed.

The company believes online gaming and sports betting offer one of the largest growth areas for the country’s gaming industry. It estimates a potential $30-35 billion market by 2033, according to the documents.

Writing in its filings, the company expressed its belief that the acquisition of William Hill would improve customer experience and profitability as compared to its current joint venture with William Hill in the US. It added that the venture is complex. The company also said it believes the market has undervalued the joint venture to the disadvantage of the existing stockholders.

Trust Securities indicated that a deal involving William Hill

The company’s potential bid for William Hill would represent a good deal at the first impression for Caesars. However, it would significantly undervalue William Hill from the gaming company’s perspective, Jefferies Group LLC’s financial analyses said. Jefferies added that the joint venture agreement reduces the amount of competition Caesars will face.

On Sunday, Trust Securities indicated that a deal involving William Hill, Caesars, and Apollo would make sense if Caesars buys William Hill US, and Apollo buys the European and other international assets.

Yahoo Finance said that Caesars stock rose 2% to $58.21 per share Monday, while William closed down 12.17% on the London Stock Exchange.

I'm Adam Shaw, Senior Editor and one of the first members at VegasSlots. I'm a massive football sports fan but also love casinos and occasional trips to Las Vegas. Gaming runs in the family

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