Last month US gambling giant Caesars Entertainment submitted a $3.7 billion bid for British sports betting colossus, William Hill. Despite the board for the British bookmaker urging shareholders to accept the proposal, it was seemingly rejected, as a rival bid came in. After being left red-faced, Caesars is now threatening William Hill with a severance of its already existing partnership if they do not reconsider and accept the bid.
A household institution in the United Kingdom, and one of the country’s most successful high street bookies, William Hill also runs a successful online casino enterprise in a handful of US states where gambling online is legal. The British company does not need to sell, but the initial offer from Caesars Entertainment was too tempting for the board, who urged it to be approved. Had the shareholders agreed, William Hill would have a larger foothold towards the top of the US gambling market.
However, the offer (which was valued at 272p per share, of £2.9 billion), appears to have been rejected. Last month, Apollo Global Management, put in a rival bid for the company. Caesars was thought to be the front-runner, due to its long-standing relationship with the British company – William Hill manages Caesars online casino brands. However, the potential rejection of the offer and the consideration of a rival bid have forced Caesars into drastic action.
Take It or Leave It
Caesars has reportedly issued William Hill with an ultimatum. If they do not accept the bid, Caesars would be prepared to terminate its online casino and sports betting agreement with William Hill. To bid for the company, Caesars had had to create 30 million new shares (worth $1.7 billion). The move is unlikely to impress many of the company’s British shareholders, with Caesar’s long having stated that it intends to sell off the British bookie’s non-US assets, which could include the thus far successful online casino operations.
The Alternative for William Hill
The ultimatum is unlikely to rattle shareholders. While the William Hill board may be behind the deal, the shareholders are unlikely to agree to dismantle the successful brand to push Caesars’ own US online gambling ambitions. The history of the 85-year old gambling entity remains in the balance.
Things are unlikely to be a picnic for Caesars, either, who would arguably find themselves in a tricky situation and behind the competition, with rival Las Vegas and New Jersey casinos such as the MGM already making terrific strides forward in the online betting world. If William Hill rejects the offer, it is not clear what Caesars’ next move would be, as they are unlikely to find a global brand with the same prowess to keep their online operations alive and kicking.