888 Eying William Hill European Arm After Caesars Takeover

Posted on: October 1, 2020, 10:27h. 

Last updated on: October 1, 2020, 11:29h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

The gaming company 888 Holdings would consider making a move for William Hill’s European arm, should it come on the market in the wake of a takeover by Caesars Entertainment.

888
CEO of 888, Itai Pazner, says the opportunity to buy William Hill’s European assets would be “relevant” for the company. (Image: 888)

On Wednesday, WH’s board announced it was unanimously recommending Caesars’ £2.9 billion ($3.7 billion USD) cash offer to its shareholders, making the deal highly likely to go ahead.

But Caesars has made it clear it has no interest in WH’s European assets and has said it would seek “alternative owners” for that division.

At an earnings call held shortly after the WH board’s announcement, 888 CEO Itai Pazner said the European arm “could potentially be something for us,” although he added that it was still too early to say.

“We are going to look at any asset that can be relevant for us, and within that list, if that opportunity [to buy William Hill’s assets] comes our way, that could be relevant for us,” he said. “We’re following what’s happening very closely.”

Unwanted Advances

This is not the first time that a combination of 888 and WH has been in the cards. In 2015, WH made a move for 888, but the £700 million ($900 million USD) on offer was rejected by a key shareholder, reportedly company founders the Shaked family.

A year later, the situation was reversed when 888 teamed up with UK casino operator the Rank Group in a £3.4 billion bid ($4.3 billion USD) for WH that was rejected.

The offer came just weeks after the WH board had ousted its CEO, James Henderson, leaving the company in a vulnerable position and refusing to negotiate. The bid was criticized by the WH board as being “opportunistic” and too low.

Betting Shop Closures

While the US ops are the real prize for Caesars, WH’s European assets are actually the most valuable. Truist analysts estimated they could fetch between $2 billion and $4.5 billion USD.

They comprise around 1,400 betting shops in the UK, plus digital operations in countries including the UK, Sweden, Italy, and Spain.

The betting shops are unlikely to interest 888, which is an online-only business, especially in the current retail betting climate. The bookmaker was forced to close around 700 shops last year because of reductions in the maximum stakes on fixed-odds betting terminals introduced by the British government.

More recently, it shuttered 119 outlets as the UK emerged from lockdown, saying that it did not expect gamblers to return in the numbers it saw pre-pandemic.

Contrasting Fortunes

In contrast, 888 said Wednesday that the increased consumer interest in its online gambling products during lockdown had resulted in a surge in profits.

Pre-tax profits were up 130 percent to $50.9 million USD in the first six months of 2020 compared with the same period last year, while revenue rose 37 percent to $379 million USD, thanks in part to the resurgent online poker vertical.

888 shares increased by almost 25 percent in morning trading in London, with stock skyrocketing more than 260 percent since the start of the pandemic.