Caesars Entertainment has reported that an initial £ 2.9 billion ($3.7bn/€ 3.3bn) bid to acquire US wagering partner William Hill Plc will go ahead.
William Hill reported to markets at the close of Friday trading that Caesars are the two suitors looking to acquire the heritage UK bookmaker alongside US private equity fund Apollo Global.
Caesars has stated that it has completed its due diligence process and is to acquire the UK bookmaker in ‘advance discussions’. At the beginning of this month, Caesars announced at a 57 percent premium on the share price of William Hill that the William Hill board was “minded to recommend” the plan to shareholders.
An expanded Caesars has submitted its £ 2.9 billion bid, having completed all of its recent $ 17 billion merger with Eldorado Resorts’ US regulatory criteria, as it aims to become the largest casino and hospitality company in North America.
Caesars expects it to close in the first half of 2021, should a buyout of William Hill be decided. Of further importance, Caesars has maintained that if the FTSE firm refuses its bid and partnership with Apollo Global, it has the right to terminate its strategic US partnership with William Hill.
Tom Reeg, chief executive of Caesars, in a statement said:“The opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect.
“William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to better serve our customers in the fast growing US sports betting and online market.
Reeg added: “We look forward to working with William Hill to support future growth in the US by providing our customers with a superior and comprehensive experience across all areas of gaming, sports betting, and entertainment.”
In spite of retaining its core business operations in the UK, through its alliance with Caesars, William Hill has become increasingly focused on its US prospects, having recently signed a new connexion between Caesars and ESPN.
In a statement, Caesars announced that, in addition to taking out $2 billion of new debt secured against William Hill ‘s non-US companies, it will fund the acquisition through a new equity increase.
“Together with iGaming, which is currently outside the scope of the joint venture, Caesars expects that the enlarged sports and online gaming business in the US could generate between US$600-US$700 million in net revenue in FY2021,” the statement added.