888 bid from William Hill unlikely to succeed
William Hill’s [LON: WMH] bid for Gibraltar-based online gambling group 888 Holdings [LON: 888] is unlikely to succeed, The Sunday Times reported, citing an insider.
The article quoted a source familiar with the bid talks -- cited in an analytical report about potential consolidation in the gambling sector -- as saying that William Hill would continue to concentrate on regulated markets.
Analysts cited by the newspaper estimated that up to 35% of 888’s total revenues could come from unregulated gambling markets, although the item added that major listed gambling companies have been withdrawing from unregulated markets due to the increased risk.
The article stated that William Hill faced similar issues with its acquisition of online bookmaker Sportingbet in 2013, but the UK-based bookmaker solved the problem by dividing Sportingbet into its regulated and unregulated businesses, with William Hill taking Sportingbet’s regulated operations in Spain and Australia and GVC Holdings buying Sportingbet’s “grey market”, or unregulated business, elsewhere. It remains to be seen whether William Hill could employ the same type of deal structure with 888, the item said.
It was reported last week that William Hill has pitched an offer for 888 at GBP 2.10 per share. The item reported previously-reported rumours that the Shaked family is unwilling to sell at a price below GBP 3.00 per share.
William Hill CEO James Henderson would be reluctant to overpay for 888 as the takeover would be his first deal since taking charge in August, the report argued.
888’s share price closed 2.25p up at GBP 1.71 in London on Friday (13 February), valuing the company at GBP 605m (EUR 817m).
Sunday Times