Sportingbet and William Hill Nearer to Deal
UK sportsbook William Hill and GVC Holdings are one step closer to sealing a takeover deal with Sportingbet gambling group, after Sportingbet agreed to Will Hill's $850 million (£530 million) purchase offer.
The proposal - the second one in a fortnight - was brought to Sportingbet yesterday, and is significantly larger than the 52.5p offer which Sportingbet's board soundly rejected.
William Hill and GVC Holdings' new offer values Sportingbet's shares at 61.1 pence each.
Britain's largest bookmaker said that Sportingbet had agreed in principle to the deal, and would accept payment in a mix of stock and cash.
In a statement issued by Sportingbet, the group said: "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 sides now have until November 13th to hammer out the terms of a formal offer.
Gambling in Regulated Markets
William Hill has entered into the takeover bid with GVC Holdings as a partner in order to ensure that it does not operate in areas which are unregulated. Some of Sportingbet's interests are in areas where regulatory rules are less clearly defined, and these are the areas where GVC Holdings will operate. GVC Holdings purchased Sportingbet's Turkish interests in the past.
William Hill, which has 2,300 British high street betting shop, is seeking to expand further outside the country's borders and is interested in acquiring Sportingbet's interests in Spain and Australia, where gambling is regulated.
Will Hill also purchased three businesses in Nevada this year.
Analysts Predict Rival Bidder
Analysts in the online gambling market realize that the takeover bid could involve a number of unforeseen obstacles for William Hill, including the chance of a rival bidder stepping in with a better offer to spoil the Sportingbet and William Hill deal.
Ladbrokes is one such rival suitor which walked away from talks with Sportingbet last year, citing the group's Turkish interests as too great a headache for investors at that stage. However, now that Sportingbet does not operate in Turkey anymore, Ladbrokes may be keen to put in a better offer.
Analysts continue to insist that Sportingbet's shares are worth as much as 90 pence each and that the group should seek a buyer which is "capable of extracting synergies from Sportingbet's businesses."
