The value of individual shares in prominent online casino and sportsbook operator 888 Holdings reportedly soared by almost 30% yesterday after the firm revealed that it will be paying less for the non-American assets of rival William Hill.
According to a Thursday report from the Reuters news service, the London-listed behemoth inked a cash-and-stock arrangement worth approximately £2.2 billion ($2.8 billion) in September that is to see it acquire William Hill’s estate of 1,408 retail betting shops and two million customers spread across the length and breadth of the United Kingdom. This deal purportedly came after American casino giant Caesars Entertainment Incorporated finalized a £4 billion ($5.2 billion) bargain of its own to take over the running of the target firm’s online and land-based operations in the United States.
Tremendous transaction:
Gibraltar-based 888 Holdings is already responsible for a vast array of iGaming domains including 888.com, 888Casino.com and 888Poker.com with the purchase of William Hill’s assets reportedly set to be its largest since listing in London almost two decades ago. The original deal was to have purportedly seen the buyer pay £834.9 million ($1.1 billion) in cash after valuing the British business being acquired at something in the region of £2.2 billion ($2.9 billion).
Discounted deal:
However, 888 Holdings reportedly used an official Thursday filing to disclose that it has now agreed an amended arrangement with William Hill that will cut the cash component of its purchase by nearly 30% to roughly £585 million ($762.1 million). The buyer purportedly explained that this came after the pair fixed the value of the assets being acquired to something between £1.95 billion ($2.5 billion) and £2.05 billion ($2.7 billion).
Read the filing (pdf) from 888 Holdings…
“The amendments to the sale and purchase agreement reflect the change in the macroeconomic and regulatory environment since the announcement of the acquisition as well as compliance factors impacting the William Hill business including actions taken as part of an ongoing review by the Gambling Commission of the United Kingdom. The board of directors of 888 Holdings continues to believe that the acquisition represents a transformational opportunity for 888 Holdings to significantly increase its scale, further diversify and strengthen its product mix and build leading positions across several of its key markets.”
Future float:
Reuters reported that 888 Holdings now plans to conclude the William Hill acquisition by the end of June after issuing as many as 70.8 million new shares to bring in as much as £136 million ($177.1 million) in fresh capital. American brokerage Jefferies Financial Group Incorporated purportedly told the news service that the revised arrangement ‘makes strategic and financial sense’ and will subsequently materialize on the buyer’s balance sheet.