Caesars Entertainment has agreed to acquire the sportsbook operator William Hill.
US casino giant Caesars Entertainment has agreed a deal for its Caesars UK Holdings subsidiary to purchase the entire William Hill business for £2.9bn ($3.72bn).
Confirmation of the deal comes after Caesars outlined its bid to acquire the bookmaker earlier this week.
The terms of the deal will see Caesars pay 272 pence for each William Hill share once its due diligence in relation to the offer has been finalised. The deal is expected to be completed in the second half of 2021.
The acquisition is still subject to approval from Willaim Hill’s shareholders, however, the bookmaker’s board has said it considers the term of the deal to be “fair and reasonable” and will recommend that the offer be accepted.
Roger Devlin, Chairman of William Hill, said: “The William Hill Board believes this is the best option for William Hill at an attractive price for shareholders. It recognizes the significant progress the William Hill Group has made over the last 18 months, as well as the risk and significant investment required to maximize the US opportunity given intense competition in the US and the potential for regulatory disruption in the UK and Europe.”
Caesars’ chief executive Tom Reeg 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.”
If the deal is successful, William Hill’s business would be broken up and Caesars would seek out buyers for all of the bookmaker’s non-US operations, including its UK operations so that the casino giant can maintain a focus on the US market.
Although Caesars noted that William Hill’s UK and non-US operations have a “strong future” the casino operator said new owners with long-term ambitions would be more suitable to run these businesses and support these operations moving forward.
The relationship between Caesars and William Hill
Caesars and William Hill are already engaged in a US-focused joint venture following a joint venture agreement that was struck by Eldorado Resorts. The deal between William Hill and Eldorado carried over to all Caesars properties following the mega-merger between the two casino operators.
The joint venture allows William Hill to run online and land-based sports betting operations through market access with Caesars in different states.
William Hill has an 80% equity ownership in the joint venture while Caesars holds a 20% interest in the venture. The two businesses have been working on plans to roll out sports betting operations in several Caesars venues in anticipation of the deal being successful.
What does Caesars hope to gain?
In a statement, Caesars outlined the strategic rationale behind the takeover of the British bookmaker.
Caesars said a combined operation would better serve customers in the US and increase market access opportunities across the US. Caesars also said it would allow for a more unified customer experience by integrating applications and wallets.
Caesars said the combined business would have a “world-class” portfolio of assets and the ability to access Caesars’ existing partnerships with sports teams and events. This will include access to Caesars’ exclusive casino partnership with the NFL.
The casino operator also said this would allow for more alignment with US media organisations. At the time of writing, Caesars is engaged in a multi-year partnership with ESPN, while William Hill is partnered with CBS.
The casino giant also mentioned that with online gambling operations, which is not covered under the joint venture but would be brought in with the combined business, the enlarged gambling operation could generate $700m in net revenue during the 2021 fiscal year.
Caesar’s CEO Reeg said: “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.”