William Hill’s $851 Million Offer For Sportingbet Acceptable

William Hill’s $851 Million Offer For Sportingbet AcceptableAt the beginning of this month, Sportingbet rejected a £350 million ($564.9 million) takeover bid by William Hill and GVC, stating that the offer significantly undervalued its business and future prospects. At the time, the offer represented the equivalent of 52.5p per share but now a few weeks on and the British e-gaming operator seems set to accept the companies’ revised offer of 61.1p a share, worth £530 million ($851m).
William Hill operates 2,300 betting shops on the British high street with 92% of its turnover derived from the UK. Consequently, Sportingbet with its strong regulated presence in Australia and Spain would present William Hill with a good opportunity to expand  overseas. For its part, junior partner in the deal GVC Holdings will be looking to acquire Sportingbet’s businesses in unregulated markets.
Following the new proposal, Sportingbet said it would now unanimously recommend the £530 million offer to its shareholders with a company statement reading: “Subject to reaching agreement upon its detailed terms and conditions, the board of Sportingbet has confirmed to William Hill and GVC Holdings that if such an offer were to be made, the board of Sportingbet would expect to unanimously recommend it to Sportingbet shareholders.”
Nevertheless, no exclusivity agreement is in place and so William Hill and GVC have until November 13th to make the offer firm. There also exists the possibility that rival suitors may seek to enter the fray and as Numis Securities analyst Ivor Jones explains:
“We continue to believe that a bidder capable of extracting synergies from Sportingbet’s businesses would be able to pay 90 pence per share. Sportingbet is now in play and likely to be seeking such a bidder.”
Meanwhile, William Hill stocks saw their share price rise by 3.4% to 337p in early trading, while Sportingbet shares also rose by 1.4% to 53.75p. GVC shares, however, were suspended at the request of the company as they seek to extract more information from Sportingbet’s accounts.

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