William Hill, Amaya drop
short-lived gambling merger talks
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[October 18, 2016]
By Kate Holton and Simon Jessop
LONDON
(Reuters) - William Hill and Canadian online gambling company Amaya Inc
have abandoned merger talks, leaving the British bookmaker struggling to
find a partner in a fast consolidating industry.
Amaya, operator of the PokerStars website, and William Hill, one of the
best known British gambling brands, said earlier this month that they
were in talks about a merger of equals but the deal was thrown into
doubt days later when a leading investor in William Hill said it would
oppose the plan.
The Canadian company said it had decided it could best deliver
shareholder value by remaining an independent company, while William
Hill said it had decided to walk away after canvassing its biggest
investors.
William Hill investor Parvus Asset Management, which came out against
the Amaya deal last week, welcomed the news.
"We're pleased that the board has decided to cancel the talks with Amaya,
and from our perspective, we're looking forward to working
constructively with the board with regard to creating shareholder value
for William Hill owners," Parvus co-founder Mads Gensmann said.
William Hill is looking increasingly isolated after European rivals
Paddy Power <PPB.I> and Betfair joined forces, while Ladbrokes <LAD.L>
agreed to unite with unlisted Gala Coral.
Betting companies are facing tighter regulation and higher taxes in
countries such as Britain and need to adapt to an environment in which
younger and more tech-savvy gamblers are increasingly betting online or
via smartphone.
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LOOKING FOR ALTERNATIVES
William Hill appears to have lost momentum after long-serving Chief
Executive Ralph Topping left the company two years ago. His successor
James Henderson departed in July after the board said he was failing to
deliver enough growth in online and international gambling.
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The
company subsequently rejected a joint takeover approach from smaller online
rival 888 and casinos and bingo halls operator Rank Group in August.
That turned the tables on William Hill which had made a 720 million pound ($895
million) bid for 888 last year.
In its statement on Tuesday, William Hill said it was focusing on the priorities
set out by interim CEO Philip Bowcock -- online, technology, efficiencies and
international.
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It
said the company would "continue to consider strategic alternatives where they
have the potential to create shareholder value."
William Hill said trading had continued to be positive in the second half of the
year and it expects operating profit for 2016 to be at the top end of the
previously guided range of 260 million pounds to 280 million pounds.
Its shares added 1.5 percent to 309.6 pence, valuing the company at around 2.65
billion pounds
Amaya said it had been informed by its former chief executive, David Baazov,
that he remained interested in buying the company but that the firm had not
received an offer capable of resulting in a transaction.
Amaya said in February it had received a non-binding proposal from Baazov to
take the company private, but the formal bid never came. ($1 = 0.8042 pounds)
(Editing by Keith Weir)
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