Entain Mulling Run at William Hill International Business

Posted on: May 19, 2021, 08:55h. 

Last updated on: May 19, 2021, 12:56h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Entain Plc (OTC:GMVHY) is considering joining the fray of bidders for William Hill’s non-US assets, including the sportsbook operator’s famed UK betting shops.

Entain William Hill
A bettor outside a Ladbrokes shop in the UK. Owner Entain could make a run at William Hill’s international assets. (Image: Getty Images)

Caesars Entertainment (NASDAQ:CZR) recently completed its $3.69 billion acquisition of William Hill. But when that deal was announced last year, the Las Vegas-based casino giant made clear it had no interest in the target’s international businesses.

The Harrah’s operator is expected to commence an auction for those assets in the coming weeks and could announce a buyer in the third or fourth quarter.

Analysts previously speculated William Hill’s international operations, including the High Street betting shops, could fetch at least $2 billion in a sale. That would help Caesars significantly defray the cost of the takeover.

We’re looking at everything, so we’re certainly also looking at whether this could be an interesting opportunity,” said Entain CEO Jette Nygaard-Andersen in an interview with Bloomberg.

For Entain, such a purchase would cement its status as one of the largest sportsbook operators in Europe, as the company already controls the Coral and Ladbrokes brands. The firm holds a dominant perch in the sports wagering market with 40 percent share.

Entain, Once Hunted, Now Hunter

Earlier this year, MGM Resorts International (NYSE:MGM) made an $11.06 billion bid for Entain, its partner on the BetMGM venture. The British company rebuffed that pitch, saying it didn’t adequately value the firm.

Due to the rapid growth of BetMGM in the US, there’s lingering speculation the Bellagio operator could revisit that proposal and make another run at its partner. In the meantime, Entain has morphed from prey to predator, making deals and putting itself in the conversation for others.

Last month, it acquired Swedish online betting operator Enlabs. It’s also a bidder for Tabcorp’s betting and media businesses. Analysts believe Entain has the inside track over Apollo Global Management (NYSE:APO) in that scenario, because the private equity firm has limited sportsbook operating experience, while the UK is already an established player in Australia, perhaps making it easier to clear regulatory hurdles that would arise through buying the Tabcorp units.

Entain offered $2.7 billion for the Tabcorp businesses. Apollo proposed $3.1 billion, but that pitch includes $500 million for the Australian company’s gaming services unit — an enterprise it’s not immediately clear that Tabcorp wants to sell.

Crowded Field for William Hill Assets

While Caesars wants to divest William Hill’s non-US businesses, others see value in a brand that’s highly recognizable in Europe and elsewhere. As such, the auction is likely to draw a slew of bidders beyond Entain.

Assuming Entain enters the fray, it would likely compete with Apollo on another front, because the private equity company previously tried to acquire William Hill outright.

Other rumored suitors include Israel’s 888 Holdings and Betfred. The former already has online casino and poker assets, indicating sports wagering fills a void, while Betfred has 1,600 retail locations in the UK.

There’s also talk some Swedish companies could make offers for the William Hill assets Caesars is selling.