William Hill Sweetens Sportingbet Bid to £530 Million

on Oct 17, 2012
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William Hill (LON:WMH) is back in the Sportingbet (LON:SBT) race with a much improved offer after a previous bid was rejected, The Times reported on 16 October 2012. If the deal goes through, Britain’s largest bookmaker would acquire Sportingbet’s lucrative operations in Australia and possibly Spain.

**William Hill Raises Offer for Sportingbet **
William Hill indicated that the offer for Sportingbet had been sweetened and the online gaming group would agree to the new bid of £530 million, after a previous offer of £350 million was rejected. The Times quotes Sportingbet as saying that it has been granted an extension of a Takeover Panel deadline until November 13, by which time William Hill and its junior partner in the deal, GVC Holdings (LON:GVC), must make a firm offer.

As was the case with the previous offer, the new bid will also include a mixture of cash, a dividend and new GVC shares, with shareholders being able to “mix and match” different elements of the deal. The new mix of cash and stock would value Sportingbet’s shares at 61.1p, up from the previous 52.5p offer rejected two weeks ago.
!m[Britain’s Largest Bookmaker Back On Track To Buy Profitable Aussie Business](/uploads/story/590/thumbs/pic1_inline.png)“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,” the company noted, as quoted by Reuters.

**Profitable Australian Business**
If the deal goes through, William Hill, which earlier in 2012 acquired three businesses in Nevada, would take control over Sportingbet’s operations in Australia and possibly Spain, where gambling is regulated. Reuters reports that Sportingbet is a market leader in Australian telephone and online gaming and in the last financial year, its Australian operations accounted for almost 70 percent of the company revenues and almost all of its profit.

In addition, the deal will also give an advantage to William Hill over its main competitor Ladbrokes (LON:LAD), which last year held takeover talks with Sportingbet. Ladbrokes, however, abandoned the talks due to worries about Sportingbet’s unregulated business.
The Financial Times reports that William Hill’s partner GVC Holdings would acquire Sportingbet’s operations in unregulated markets. Last year, GVC bought the online gaming group’s unregulated Turkish business for €142.5 million (£115.8 million).

**Deal Could Still Collapse**
Yet, despite the positive prospects, Sportingbet has said that the deal could still collapse. In addition, analysts estimate that a rival bidder could emerge since at this point there is no exclusivity agreement. “We continue to believe that a bidder capable of extracting synergies from Sportingbet’s businesses would be able to pay 90 pence per share,” points out Ivor Jones, analyst at Numis Securities, as quoted by Reuters. “Sportingbet is now in play and likely to be seeking such a bidder.”
The FT however, quotes people familiar with the current bid as noting that William Hill’s agreement with
GVC would make it too difficult for rivals to enter the fray, with Sportingbet’s unregulated operations being too risky for another listed company to take on.

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