William Hill To Be Broken Up – Death Of A British Institution?
Last week it was reported that Caesars Entertainment, the American company behind Caesars Palace Hotel & Casino in Las Vegas, was looking to buy British bookmaker William Hill in a deal worth £2.9 billion. The cash offer of 272 pence per share was all but agreed between the pair, with William Hill saying that its directors would ‘unanimously and unconditionally’ recommend that the company’s shareholders accept the proposed deal.
Now it appears that Caesars Entertainment will immediately look to get rid of all of the United Kingdom and European Union based parts of William Hill, keeping only the assets and licences that are useful for operations in the United States of America. That obviously leaves the doorway open for other companies to come in and buy the likes of William Hill’s shops and the online assets in the UK and EU, potentially leading to the end of the British institution.
Who Might Buy The British Shops Of William Hill
At the time of writing, William Hill has more than 1,400 shops as part of its business. There is also a strong online presence in the United Kingdom that has helped to support those shops during the recent tough times for bookmakers. If Caesars Entertainment will look to shed itself of those parts of William Hill after the purchase then the obvious next question becomes, ‘who will want to buy them?’ The first answer that springs to mind is Fred Done of Betfred fame.
When betting shops are up for sale you’ll usually find Fred Done close to what’s going on, such is the Manchester-based bookmaker’s business built around land-based properties. Many believed that Done’s desire to get hold of Totesport’s physical shops was behind his desire to to buy the Tote when the government decided to sell it back in 2011. The fact that he’s built up a 6% share in William Hill since March adds fuel to that particular fire.
When William Hill’s governance approved the offer from Caesars Entertainment, Done reportedly looked set to pocked £170 million from his shares. That, many believe, will be the seed money for the Betfred owner to buy the retail portfolio of William Hill. It would go a long way to making Betfred the biggest bookmaker in the country, at least in terms of the number of retail shops on the company’s books if nothing else.
Is Buying The Shops A Good Idea?
The only thing that might give Fred Done, or indeed any other prospective investor, pause for thought when it comes to taking advantage of Caesar Entertainment’s desire to sell of the UK-based parts of William Hill is the current global climate. There can be little doubt that the British government’s attempts to deal with the health crisis has led to a reduction in footfall in shops up and down the country, presumably limiting their worth.
Whilst Betfred is one of the few major companies with shops in town and cities around the country, would adding 1400 plus more to their roster really be the most sensible move right now? As things currently stand, we have no idea when any sense of normality is likely to return to British high streets and so taking on the cost of those shops as well as the employees that work in them wouldn’t necessarily be the most business-canny move.
Companies Interested In William Hill Online
Whilst William Hill is far from the most popular betting site on the internet, the company’s name and reputation means that it does more than its fair share of business. The client list at William Hill’s online operation alone would be worth a company spending big money to procure, which probably helps to explain why 888 Holdings is reportedly keeping an eye on proceedings. The two companies also have a history of attempted takeovers of each other.
In 2015, for example, William Hill tried to buy 888 Holdings before the online bookmaker teamed up with Rank Group to make an offer for William Hill the following year. That proposed takeover was worth more than £3 billion, but was immediately rejected by William Hill, who declared that the bid had been ‘unsolicited’. That offer valued William Hill at 199 pence per share as well as 0.86% of a share from the combination of 888 and Rank.
That would have put the value of William Hill at around £3.1 billion, which is less than William Hill is being sold for to Caesars Entertainment. The difference between the deals is that the 888 Holdings one was a complex affair, going three ways and adding £2.2 billion worth of debt to the merged group if it had gone through. 888 and Rank used a different calculation method on the deal that they said valued William Hill at .£3.4 billion.
Having missed out on William Hill in 2016, it now looks as though 888 Holdings and Rank will team up again to bid for at least the online part of the company. Given that Rank is the parent company behind the likes of Mecca Bingo and Grosvenor Casinos, it is not out of the realms of the possible that they might also wish to buy at least some of the physical shops that are part of the William Hill brand.
If 888 Holdings and Rank don’t come together to buy the online part of the business at the very least then it’s likely that private equity investors will step in instead. The United Kingdom’s online betting market it is both a lucrative and consolidated space, meaning that it would be good business for any company able to take over William Hill’s books. It is likely to also be the only way that the company’s name and branding will remain around in the long-term.
Does It Spell The End Of A British Institution?
If Fred Done manages to get hold of the William Hill shops then it’s extremely unlikely that he’d keep them with their current branding. Instead he’d almost certainly look to bring them under his Betfred umbrella, meaning a departure of a British betting institution that has been on our high streets for more than half a century. Similarly, should 888 Holdings purchase William Hill’s online arm then you can imagine they will look to rebrand it pretty quickly.
The result of all of this is the likely death of William Hill, at least on British soil. Whilst Caesars Entertainment might well consider keeping the brand alive in the United States, where it has good name recognition, and it might also remain in place in European Union countries such as Spain for the same reason, neither Betfred nor 888 Holdings needs William Hill’s name in the UK. It may also spell the beginning of the end for independent British bookmakers.
Should William Hill depart our shores for good then it would leave just Betfred as a major independent bookie in the United Kingdom. The likes of Paddy Power, Coral and Ladbrokes may all have kept their own names and branding, but their mergers with other companies mean that they are no longer truly independent. The volatility of the market alongside the ever-tightening regulations in the UK help to explain why most bookmakers are giving up their independence.