Tue. Jul 5th, 2022


Shares in online betting company 888 surged on Thursday after it agreed to cut the price for William Hill’s international business after its acquisition from US casino operator Caesars Entertainment in September.

The Gibraltar-based gambling group said it would buy William Hill’s non-US business for £ 1.95bn to £ 2.05bn, down from £ 2.2bn agreed seven months ago, sending shares 24 per cent higher to 237.8p by late morning in London.

It said the decision reflected the “change in the macroeconomic and regulatory environment since the announcement of the acquisition as well as compliance factors impacting the William Hill business”.

The UK Gambling Commission is reviewing William Hill’s license after it supplied incorrect data to the regulator. Caesars has agreed to indemnify 888 up to £ 150mn against any outcome of the review.

The government is also reviewing gambling laws to tackle addiction, with a white paper anticipated this year, adding to uncertainty over the outlook for British betting.

The revised terms mean 888 will pay £ 250mn less as an initial cash consideration, down from £ 835mn to £ 585mn.

The group acquired William Hill’s non-US business last year after US casino company Caesars took the bookmaker private in 2020.

To pay for the deal, 888 also announced an accelerated book build through an equity issuance of 19 per cent of share capital, down from previous plans to raise £ 500mn in equity to finance the takeover.

The US Supreme Court overturned a federal bill banning sports betting in 2018, which has led European companies to rush into the US market to capitalize on American appetite for gambling on sports.

Analysts at Peel Hunt said the acquisition would “transform 888 in terms of scale and therefore relevance to investors”, with the retail business providing the online sports company with cash to tackle debt.

After a boost to online betting during the coronavirus crisis, gambling in high-street shops has rebounded, with Entainowner of Ladbrokes and Bwin saying last month its stores were nearing pre-pandemic levels.

However, analysts at Regulus Partners said the “UK online market has become much tougher during [the second half of 2021]especially for larger operators, with overall revenues down 11 per cent [year-on-year]”.



Source link

By admin

Leave a Reply

Your email address will not be published.