On Tuesday, the British bookmaker William Hill announced that the court had cleared its £2.9 billion takeover by the major US casino company Caesars Entertainment. The court’s decision was made despite the disapproval of the deal by some shareholders.
The minority shareholder HBK had shared concerns about the merger deal due to disclosures related to the takeover deal. HBK’s disapproval of the merger was also supported by the US hedge fund GWM Asset Management. Both of them addressed the issue in a statement to the board, pointing out the lack of proper disclosure by William Hill as the reason for their disapproval.
William Hill’s Takeover by Caesars Entertainment Approved Despite Investors’ Objections
The £2.9 billion takeover by Caesars Entertainment was announced back in September 2020, with William Hill’s board of directors recommending the bid to its shareholders. The disclosed offer represented a bid of £2.72 per share, which was higher than the competing proposition of equity company Apollo.
In early March, William Hill confirmed its delisting from the London Stock Exchange on 1 April. Along with that announcement, it became clear that all FTSE share transactions will be cancelled by 6 April.
The bookmaker’s board of directors promised that it will update shareholders with further details about the takeover deal. Shareholders HBK and GWM Asset Management, however, did not approve of the deal as they claimed that the FTSE-250 board did not provide enough information about the deal at the time shareholders were asked to record their votes. Some analysts claimed that if the deal with Caesars Entertainment was to fail, the share prices after the company’s recovery could have been pushed to £4.90.
The court’s decision was postponed for almost three weeks, which gave hedge funds time to take advantage of the situation and started purchasing William Hill shares. Despite the disapproval of some shareholders, however, on Tuesday, the court sanctioned the deal.
Caesars Entertainment Hopes for a Profitable Year After the Merger Deal
After the court’s decision, Tom Reeg, Caesars’ chief executive, commented on the company’s excitement to combine its different services such as brick-and-mortar casinos, online gaming, and sports betting in the US. He added that the sports betting expertise of William Hill will add to Caesars’s services, allowing the merged companies to offer even better online sports betting experience to punters based in the booming US market.
Following the merger deal, Caesars shared its expectations for revenue of $600 million to $700 million in the following fiscal year. Unfortunately, the merger deal follows a tough year for William Hill, with huge losses recorded due to the lockdown periods during the pandemic.
Last year, William Hill’s profit was down 91%, sinking to £9.1 million. The huge losses forced the company to permanently close 119 of its 1,500 betting shops in the UK.
- Author
Olivia Cole
