According to a press release statement, Caesars expects to receive, after repayment of debt and other working capital adjustments, net proceeds from the transaction of approximately £835 million or $1.2 billion.
“I am delighted that, as we said we would when we announced the offer for William Hill PLC, we have found an owner for the William Hill business outside the US which shares the same objectives, approaches and longer-term ambitions of that business,” said Tom Reeg, CEO of Caesars Entertainment.
The transaction is subject to receipt of the approval of shareholders of 888 Holdings Plc and regulatory approvals. Caesars’ expectation is that the transaction should close “during the first quarter of 2022.” Deutsche Bank and Linklaters LLP represented Caesars on the transaction.
In order to fund the acquisition, 888 obtained fully committed debt financing from J.P. Morgan, Morgan Stanley and Mediobanca of approximately £2.1 billion, including approximately £1.6 billion (equivalent) of term loans and approximately £500 million of bridge loans/senior secured notes.
“The acquisition of William Hill international is a transformational and hugely exciting moment in 888’s history,” said Itai Pazner, CEO of 888. “This transaction will create one of the world’s leading online betting and gaming groups with superior scale, exceptional brands, increased diversification, and a platform for strong growth.”
By having entered the agreement to acquire William Hill International, 888 expects to improve its operations by bringing together two highly complementary businesses and combining two of the industry’s leading brands, according to a press statement.
The acquisition represents for 888 a “transformational opportunity” to significantly increase scale, diversify its product mix and accelerate the upward shift of its revenue growth profile. Operating efficiencies are expected from the 888 and WHI combination, including pre-tax cost synergies of at least £100 million per year, leading to improved profit margins.
“Our strategies are also complementary, being digitally-led, customer-focused, and committed to player protection and raising industry standards around safer gambling,” further added Pazner. “We are also excited about the opportunities that the Retail business provides and see significant brand benefits to the Enlarged Group from its large estate.”
The enlarged group resulting from the acquisition will be “strongly growth-oriented”, benefitting from a clear scale advantage and strong product and geographic diversification.
News on 888’s interest in acquiring William Hill’s assets have been circulating for a time now, and earlier this week it was reported that the company was in “advanced talks” with Caesars. 888’s offer outbid those by Apollo Global Management and CVC Capital Partners, which were also reportedly interested in the assets.
William Hill’s non-US assets include 1,400 betting shops, and its UK and European online operations. The company was taken over in April by Caesars in a deal valued at £2.9 billion.
William Hill’s UK betting shops posted revenue down 30% last year, amid pandemic-related lockdowns. However, the company reported positive results in Q4 2020, thanks to a stronger performance from its sport-betting business in UK and US. Revenue in said quarter was up 9% year-on-year, an improvement compared to a 9% fall in Q3.