Amaya and William Hill in merger talks

The talk about town over the weekend, apart from than The Donald‘s fondness for groping women (what a surprise that was), was the news of a potential mega merger between Amaya and William Hill.

Reuters reported Friday that merger talks between the two industry giants were underway. On Saturday, William Hill responded to media speculation with a press release confirming that they were, “in discussions regarding a potential all share merger of equals.”

The release went on to say that,

“The potential merger would be consistent with the strategic objectives of both William Hill and Amaya and would create a clear international leader across online sports betting, poker and casino.”

At current valuations, the merged entity would be worth over £4.5 billion.

The news was greeted warmly by investors in Amaya whose share price jumped almost 10% on Friday (below chart in CAD).

William Hill shares jumped similarly on the news, arresting a weekly slide prompted by talk of a possible ban on UK TV advertising of online gambling services (below chart in GBP).

Although today’s trade has so far given back most of Friday’s gains. Perhaps a recognition that a deal is far from done?

In 2015 William Hill made an unsuccessful play for 888. Only a few months ago negotiations for a 3 way merger with 888 and Rank Group also fell apart.

This time around both parties seem to be on the same page and equally motivated to do the deal. Amaya released an identical statement confirming the talks and the strategic benefits of the merger.