Private Equity Firms Emerge as Suitors for William Hill’s Non-US Assets

Private equity firms are believed to be doing the numbers on William Hill’s non-US operations after the British bookmaker accepted a £2.9 billion offer from casino giant Caesars Entertainment Inc.

Caesars has revealed plans to offload William Hill’s network of retail betting shops around the UK as well as the operator’s European operations after it finalizes the proposed acquisition.

According to recent reports, buyout firms CVC Partners and Apax Partners are lining up bids for William Hill’s European division. News about the private equity groups’ interest in the company emerge shortly after reports that Apollo Global Management was preparing a bid for the bookmaker’s betting shops and other non-US assets.

Apollo previously approached William Hill with an informal full takeover offer, but the legacy gambling operator accepted Caesars’ bid.

The Telegraph reported that both CVC and Apax are preparing bids of around £1.5 billion for William Hill’s non-US assets. None of the groups have commented on the matter.

Reports surfaced in early October that billionaire bookmaker Fred Done (owner of Betfred) was interested in William Hill’s UK operations, but a spokesperson for Mr. Done eventually said that neither the businessman nor Betfred would be bidding for the fellow bookmaker.

Mr. Done has built a significant stake in William Hill since March to become one of the company’s largest stakeholders.

Lockdown to Hit Profits

William Hill has recently warned that England’s second nationwide lockdown, which took effect last week, would hit profits significantly. The new Covid-19 measures resulted in the closure of all betting shops and other gambling establishments around the nation.

The company said in a trading statement last week that it estimates “on average, the closure of 100 shops for four weeks would reduce EBITDA by circa £2m.”

The nationwide closure of betting locations comes as another big blow to William Hill’s retail betting arm. Last year, the company was forced to shutter 700 betting shops after a Government crackdown on the controversial fixed-odds betting terminals. It also announced this past August that it would close permanently 119 retail betting locations as it did not expect to reach pre-pandemic levels anytime soon.

The bookmaker’s acquisition by Caesars is subject to William Hill shareholders voting in favor. The transaction will be put to a shareholder vote on November 19.

Caesars already owns a 20% stake in William Hill’s US arm. The casino operator inherited the partnership with the British bookmaker from former Eldorado Resorts when Eldorado and the old Caesars closed a $17.3 billion tie-up this summer.

Eldorado and William Hill teamed up in 2018 to jointly explore sports betting expansion around the US. As part of their partnership, William Hill became the exclusive operator of sportsbooks at Eldorado properties. After Eldorado and Caesars combined, the British bookmaker also became the exclusive operator of betting facilities at Caesars properties.

When it tabled its offer to fully acquire William Hill, Caesars said that it would be able to exercise the right to terminate aspects of its US joint venture with the sports betting operator if the latter chose to accept a rival takeover from other potential bidders.

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