William Hill buys out Playtech stake in WHO

William Hill and Playtech’s partnership in William Hill Online (“WHO”) is coming to an end.

William Hill will exercise it’s option to buyout their junior partner’s stake (29%) in WHO, for £425 million.

WHO has seen William Hill double it’s online business over the last four years, from online net revenue of £203.5 million in 2009 to £406.7 million in 2012. In the same period retail (offline) net revenues have grown only modestly from £757 million to £837.9 million. Williamhill.com now represents half of group revenue, and this proportion is growing fast.

Despite the commercial success of WHO, the relationship between Hill’s and Playtech has been a rocky one to say the least. In early 2011 William Hill took out an injunction against Playtech to end merger discussions with  Ladbrokes. Later that year strikes and mass walk-outs at WHO’s Tel Aviv offices confirmed (in case there were any doubts), the friction between the partners.

The buyout price gives Playtech a great return on their £150 investment in WHO four years ago and has been described by a few analysts as being on the high side considering earnings multiples. But clearly numbers were not the only consideration here.  The next stipulated buyout opportunity in the JV agreement was 2015, and William Hill obviously don’t have the patience to wait until then!

As for implications for William Hill’s live games we’ll have to wait and see. Cutting all ties with Playtech would mean dropping their live dealer games when the license expires. It would be a pity to see the only Evolution Gaming/Playtech duel offering come to an end. Teddy Sagi may be hard to deal with, but his company’s live games are a lot of fun to play!