William Hill & Amaya merger valued at £4.5-5 billion

UK business news sources have valued the potential merger of FTSE-listed William Hill Plc and Toronto TSX operator Amaya Inc at a combined value of £4.5-5 billion.

On late Friday, William Hill and Amaya governances declared that they had entered initial talks discussing plans for an ‘all stock merger of equals’.

The governances’ further detailed that the potential merger was consistent with both parties’ ‘strategic ambitions’, with the goal of creating a “clear international leader across online sports betting, poker and casino”.

At present, Amaya the operating company of market leading online poker operator PokerStars is valued at approximately $2.4 billion (£1.9 billion).

Following a tough 2016 for William Hill, in which the company has been negatively impacted by increased taxes and a decline in its digital performance, the UK legacy operator is valued at circa £2.6 billion.

Reviewing their options, William Hill and Amaya governances are faced with tougher market conditions. The global gambling sector has seen mass industry consolidation in 2015/16, seeing the formation of giant enterprises in Paddy Power Betfair and Ladbrokes-Coral.

This August William Hill governance rejected an ambitious three-way tie up with competitors 888 Holdings and Rank Group Plc (valued at £3 billion). At the time William Hill stated that the proposition was too risky and that the bidding parties had undervalued the firm’s positions and assets.

Outlining William Hill and Amaya’s ambitions of creating a global gambling powerhouse, industry analysts have pinpointed to the combined digital revenues of £1.25 billion (for FY 2015) should a merged enterprise be created.