£6 Billion-Worth Caesars William Hill Deal Collapses Over Price

0
1347
£6 Billion-Worth Caesars William Hill Deal Collapses Over Price
William Hill and Caesars fail to reach an agreement due to price point

Caesars Entertainment Corp and William Hill have been talking about merging since last fall. This deal between the two powerhouses would mean that the biggest US gambling giant takes over the prominent British gambling operator to create a massive £6 billion-worth gambling giant. This merged gambling powerhouse would have a great position in the United States, in its recently liberalized gambling market.

Sources close to the companies have stated that the two powerhouses held discussions about their merger deal, but their deal collapsed over price. Everything started when the British bookmaker decided to invest efforts and money into expanding their service in the United States following the US Supreme Court struck down of the federal ban regarding sportsbetting activities. This paved the way for the sportsbetting legislation in several states within the country.

The UK Gambling Operators Facing a Crackdown

When it comes to its domestic market, all United Kingdom operators are facing a crackdown on different regulatory pressures including fixed-odds gambling terminals. Back on the 1st of April, the United Kingdom Government implemented a great reduction of the maximum allowed bets on the land-based gaming machines from £100 to only £2.

Naturally, this measure posed a great revenue and profitability hit to all gambling operators. This naturally leads to gambling facilities closures as well as job losses. When it comes to William Hill, it is one of the biggest UK gambling facilities and owner of the second largest brand of betting shops in the country.

It should be noted that William Hill has been struggling financially especially with ailing its profitability long before the United Kingdom Government implemented a reduction on the maximum allowed bets. Furthermore, the company’s digital operator also has failed to keep up with its competitors which resulted in revenue decrease. Following the company’s issues regarding ailing profitability, William Hill has announced a massive pre-tax loss worth around £722 million for the last year. Naturally, this led to the company’s shares rapidly decreasing in value.

William Hill Engaging in Merger Talks

The latest news of Caesars and William Hill engaging in merger discussions once again sparked speculations that the British powerhouse is the major takeover target especially as the biggest William Hill competitors have already taken their part in the consolidation of the field which resulted in signing multi-billion deals which could potentially offset their losses which the companies will unavoidably suffer from the crackdown. Unlike William Hill, other British gambling operators can mitigate regulatory pressure effects.

Prior to the regulatory pressures, William Hill has engaged in merger talks with other potential suitors. Back in August of 2016, William Hill rejected a massive merged bid from The Rank Group and 888 Holding. Then, just several months later, the company rejected a massive, £5 billion-worth proposal from Amaya now known as The Stars Group. Both of these merger deals failed due to pressures posed by the company’s largest stakeholders who said that William Hill cannot engage in risky deals.

At the beginning of 2019, the company purchased a prominent online gambling brand, Mr Green & co AB or MRG for around £242 million. The deal is the last straw William Hill to try and improve its digital presences. However, sources close to the company said that its CEO Philip Bowcock is still interested in selling the business and who is better than the US powerhouse Caesars. Caesars itself has been making headlines following its biggest stakeholder pressing the company’s officials to either merge with another company or to sell and one of the next logical steps is to merge with the British operator.

Image credits: https://www.yogonet.com/

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments