Caesars makes early £2.9bn play on William Hill takeover

Caesars Entertainment has confirmed that it will move forward with an initial £2.9 billion ($3.7bn/€3.3bn) offer to acquire US wagering partner William Hill Plc outright.

Closing Friday trading, William Hill confirmed to markets that Caesars alongside US private equity fund Apollo Global, are the two suitors seeking to buyout the heritage UK bookmaker.

Caesars has confirmed that it has concluded its due diligence process and is in ‘advance discussions’ to acquire the UK bookmaker. At a 57% premium on William Hill’s share price at the start of this month, Caesars has stated that the William Hill board was “minded to recommend” the proposal to shareholders.

An enlarged Caesars has tabled its £2.9 billion bid, having completed all US legislative requirements of its recent $17 billion merger with Eldorado Resorts, as it seeks to become North America’s biggest casino and hospitality business.

Should a buyout of William Hill be agreed, Caesars expects that it will close in the first half of 2021. Of further significance, Caesars has maintained that it holds the right to terminate its strategic US partnership with William Hill, should the FTSE firm reject its offer and partner with Apollo Global.

Tom Reeg, Caesars chief executive, 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.”

Despite maintaining its core business operations in the UK, William Hill has become increasingly focused on its US prospects via its partnership with Caesars – having recently signed a new link-up between Caesars and ESPN.

In a statement, Caesars stated that it would fund the acquisition via a new equity raise, in addition to taking out $2 billion of new debt secured against William Hill’s non-US businesses.

“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.