888 is buying William Hill

The online gambling world’s latest big takeover has been announced. 888 Holdings are to buy William Hill’s UK and European businesses from Caesars Entertainment for £2.2 billion.

Joint releases at the William Hill Plc and 888 Holdings websites outlined particulars of the deal, including the following:

• The purchase price of £2.2 billion will be entirely debt financed, with J.P. Morgan, Morgan Stanley and Mediobanca funding £2.1 billion, the remainder covered by a revolving credit facility.
• 888 will also sure up their balance sheet with a £500 million equity issue.
• The acquisition, subject to 888 shareholder and FCSA approval, is expected to complete during the first half of 2022.
• Cost synergies of at least £100 million per year are expected.
• The combined entity would have had 2020 annual revenue of $2.5 billion and EBITDA of $464 million. 888’s share of this total…$850 million and $155 million respectively.
• 888 gain ownership of William Hill’s 1,400 betting shops in the UK, and through the WH online business around 2 million customers in UK.
• The purchase also bolsters 888’s EU presence particularly in William Hill’s (and subsidiary Mr Green’s) core markets of Italy, Spain and the Nordics.

Itai Pazner, CEO of 888 had this to say of the deal:

“The acquisition of William Hill International is a transformational and hugely exciting moment in 888’s history. This transaction will create one of the world’s leading online betting and gaming groups with superior scale, exceptional brands, increased diversification, and a platform for strong growth.

William Hill is an iconic sports brand, making it the ideal complement to 888, one of the leading global online gaming brands…”

The bidding war for William Hill EU/UK

Caesars Entertainment bought the entire William Hill group earlier this year for £2.9 billion. They made it clear from the outset they were only ever interested in the group’s US assets. All non-US assets (the bulk of the business, comprising over 85% of total revenue in 2020) were to be sold off once the purchase was complete.

Buyers have been lining up to buy William Hill’s non-US assets ever since.

888, Apollo Global Management, Kindred and BetFred all threw their hats in the ring as interested parties. 888’s £2.2 billion appears to be the knock out bid. Caesars would be happy with the result, remembering they were reportedly only looking to get, ‘in excess of $1.5 billion’ for these assets.

It will bring the price they paid for the William Hill’s US business down to just £700 million, or just under $1 billion.

The new live casino business

Let’s face it, while live casino games have come a long way, they still represent a small(ish) part of this deal. Strategic discussions probably focussed more on the value of William Hill’s sports betting business and 3 million odd online customers generally, and less on the merits of their live casino.

And to be fair, their live casino offering isn’t what it once was. They were clear leaders back in the halcyon days, with the biggest and best private rooms (yes, they had 3 distinct private areas before many of their competitors had one) and a fully loaded tournaments program. They were also the first European facing operators to carry multiple live providers.

In the last couple years, William Hill’s live casino has stood still, while the competition (888 Casino among then) have passed them by. Even subsidiary Mr Green also progressed their live casino offering far more aggressively than their parent brand.

Perhaps WH’s arrested development has been due to the expected and inevitable changes at the corporate level. Why push to make great strides with merger or consolidation and resulting change on the horizon anyway?

Well, now that the corporate change has happened, lets hope William Hill’s live casino can get things moving again. 888 are certainly enthusiasts in this space so lets hope this enthusiasm is passed on.