London private equity firm Silchester has acquired a 5% stake in William Hill Plc, becoming the fourth largest shareholder of the FTSE-listed operator.
Led by fund manager Stephen Butt, who is considered one of London’s top performing investors, Silchester specialises in taking ‘long-hold’ positions on businesses which it believes are undervalued.
A tough two-years in which William Hill performance has been impacted by higher operational costs, increased taxes and the decline in performance of its digital assets, has seen the FTSE operator’s share price decline to 244p.
Silchester undertakes its investment in William Hill, at a period when City analysts are sceptical of the industry’s future outlook, with growing concerns relating to potential curbs on fixed odds betting terminals (FOBTs) staking.
Currently, all industry stakeholder eyes are firmly fixed on this autumn’s delayed government publication of industry policy relating to FOBTs services and advertising standards.
As an asset, William Hill is being closely monitored by industry analysts, as the remaining UK legacy bookmaker which has not merged or undertaken any M&A activity within the saturated gambling sector.
In 2016, William Hill governance had a difficult relationship with its largest shareholder, hedge fund Parvus Asset Management (14% stake), whose lead financier Mads Eg Gensmann criticised the board for pursuing a three-way tie up with Amaya Inc and Rank Group Plc.
Last February, The Sunday Times reported that Parvus was lobbying William Hill governance for a 2017 sale, further detailing that the London hedge favoured selling the bookmaker over any potential industry merger.