William Hill's shops have been closed during the COVID19 outbreak - Dominic Lipinski/PA Wire/PA Images

William Hill plans for future with new share placing

William Hill is raising a war chest to fund its long-term growth ambitions, mainly in the US sports betting market.

Alongside a positive trading statement on Tuesday 16 June, the FTSE250 betting group said it intends to issue a new ordinary share placement for 19.99% of its existing share capital.

CEO Ulrik Bengtsson was upbeat about the company’s performance over the past six weeks: “The return of sporting events has driven a strong recovery in our online volumes,” he said. “Our UK Online business is in a better place than ever and our international business is displaying solid growth.

“In the US we have used this period of lockdown wisely to move our product forward and we are now in a strong position to capitalise on the US growth opportunity that lies ahead.”

Building on that positive drive, the firm has activated an ‘accelerated bookbuild’ to raise working capital for ‘its long-term growth ambitions, to strengthen its balance sheet and increase its strategic and financial flexibility.’ The global operator stated that funds will help accelerate its ‘digital momentum’ amid an expected drop in its retail footprint.

William Hill further proclaimed that the US market represents the firm’s most profitable opportunity as it seeks to advance its commercial partnership with casino operator Eldorado and media group CBS.

It highlighted Eldorado’s acquisition of Caesars Entertainment, in which William Hill states that it has begun preparations to bring a Caesars-branded sportsbook into play.

“The proceeds of the Placing will be used to strengthen the Company’s balance sheet providing strategic and financial flexibility during these unprecedented times, and to ensure we have a balance sheet to match our long-term growth ambitions,” continued the William Hill transaction note.

“We believe that the placing will allow us to continue to execute on those ambitions, most noticeably in building on our leading position in the fast-growing US market. Importantly, it will also provide wider Group resilience in the event of further economic and regulatory disruption.”

The company has provided more detail on its ‘strong recovery in recent weeks with the easing of COVID-19 restrictions and the progressive return of sporting events’.

The firm said that online sports wagers improved significantly six weeks to 9 June 2020, benefiting from the resumption of horseracing and the German Bundesliga. During March and April, customers continued to place bets on alternative products such as table tennis and the firm noted that activity remained high alongside the return of horseracing and football.

US sports staking benefited significantly from the availability of alternative sports and the resumption of UFC and NASCAR in May. Although many casinos remained closed, William Hill operated drive-through sportsbooks in Nevada, a state where customers must sign up in person to use the William Hill app.

It said this initiative proved popular and generated ‘considerable re-engagement’ online. It also remains on track to launch online gaming in New Jersey upon receipt of regulatory approval.

For the new placing, William Hill has appointed Barclays Plc and Citigroup to act as joint-bookrunners facilitating the transaction for institutional investors, which the company aims to execute by Friday 19 June 2020.

Backing the directive, William Hill said that its executive team members will subscribe to the new share placement at its ‘placing price’ of 10p each per capital share of the company, contributing approximately ‘£200,000 in aggregate’.

The corporate filing also confirmed that William Hill will open its bookbuild to retail investors, who will be allowed to participate in the transaction through the LSE PrimaryBid platform.

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