888 agrees £2.2bn deal to buy William Hill’s European business
888 will take over William Hill’s international arm from Las Vegas casino operator Caesars Entertainment.
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Your support makes all the difference.Online gambling group 888 has agreed a £2.2 billion deal to buy William Hill’s European business and its 1,400 UK betting shops in a move that will see it return to British hands.
888 will take over William Hill’s international arm from Las Vegas casino operator Caesars Entertainment which had acquired the gambling giant in April for £2.9 billion.
888 said the deal will create a combined group with more than 12,000 employees and annual revenues of 2.5 billion US dollars (£1.8 billion).
There had been speculation that 888 may look to offload William Hill’s betting shops and keep just the online part of the business, but it said on announcing the deal that it is “excited about the opportunities that the retail business provides”.
Caesars had made it clear when it snapped up William Hill that it only wanted its American unit, sparking a race to buy the European operations.
888 had emerged as the front-runner on Wednesday after outbidding rival private equity suitor Apollo Global Management.
This transaction will create one of the world's leading online betting and gaming groups
Itai Pazner, chief executive of 888, said: “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.”
He added: “We are also excited about the opportunities that the retail business provides and see significant brand benefits to the enlarged group from its large estate.”
888 said it had secured debt financing for the deal of around £2.1 billion and also expects to raise around £500 million through a rights issue.
Ulrik Bengtsson, chief executive of William Hill international, said: “Scale is increasingly important in our sector and the combination of the businesses will provide a powerful alignment of brands and technology.”
The takeover by 888 Holdings of William Hill’s International assets offers a lifeline for the 1,400 shops it owns across the UK
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said the deal signals that “there’s still a future for the high street betting shop”.
“The takeover by 888 Holdings of William Hill’s International assets offers a lifeline for the 1,400 shops it owns across the UK,” she said.
“Caesar’s Entertainment, which acquired William Hill in April, only had eyes for its US business, and the future of the British shop network looked uncertain.
“But now it seems the retail operation will be a key part of 888 Holdings’ strategy to create a global gaming and betting group.”
But she added: “Although this is a vote of confidence in the network, it’s likely there will be a further shake-up in the branch footprint, not least because of the ongoing shift to online betting and profit headwinds caused by slashing of maximum bets on fixed-odds betting terminals.”
The purchase of William Hill earlier this year was part of a series of attempted takeovers of the UK’s gambling industry by US rivals.
In January this year, US firm MGM Resorts backed out of a potential £8 billion bid for Entain, which owns Ladbrokes and Coral.
After the deal fell through, MGM was banned from making another approach to the company for six months. This ban has now lapsed.