William Hill suitor Caesars Entertainment laid its cards on the table today with details of a potential £2.9 billion offer for the UK bookmaker.
The owner of Caesars Palace has finished due diligence and is in advanced discussions with Hills over a potential offer worth 272p a share.
At a 57% premium on the FTSE 250 index company’s share price at the start of this month, Caesars said the William Hill board was “minded to recommend” the proposal to shareholders.
Caesars, which owns the Playboy Club in London, still faces competition after William Hill revealed on Friday that it had also received interest from the private equity firm Apollo.
Caesars is one of the largest gaming-entertainment companies in the US, with 54 properties in 16 states hosting approximately 64,000 slot machines and 3,000 table games.
The company already operates a US joint venture with William Hill under which the UK firm runs online sports betting operations through Caesars’ market. Caesars believes a merger will be able to broaden the scope of this partnership.
Caesars CEO Tom Reeg said: “The opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect.
“William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to better serve our customers in the fast growing US sports betting and online market.”
William Hill was founded in 1934 and employs 12,000 people in 12 countries. The majority of its £1.6 billion annual revenues are generated in the UK, but the company has increasingly been focused on the United States after a 2018 ruling by the Supreme Court that the federal ban on state sponsored sports betting was unconstitutional. It now operates in 12 states, including Nevada, Colorado and New Jersey.
The company was further boosted earlier this month when Caesars signed a deal with major sports broadcaster ESPN, meaning William Hill’s odds and markets appear on ESPN.com.
However, Caesars warned today that a successful bid by Apollo would result in the William Hill joint venture losing its rights to operating sports books at Caesars casinos.