Caesars in 'advanced discussions' over £2.9bn William Hill deal

28 September 2020, 07:18 | Updated: 28 September 2020, 17:11

Casino giant Caesars Entertainment has confirmed it is in "advanced discussions" over a £2.9bn takeover of William Hill.

The announcement comes after William Hill said on Friday that it had received approaches from Caesars as well as private equity firm Apollo.

William Hill's board of directors has now told Caesars that its offer "is at a price level that they would be minded to recommend" to shareholders, the US-based casino firm said.

Shares in the UK bookmaker had surged on Friday as details of possible bids emerged, taking its value to just under £3.3bn, or 312 per share.

The Caesars offer disclosed on Monday, at 272p per share, fell short of that, prompting a 13% fall in William Hill stock when markets opened. It closed 11% lower.

But it was still 27% higher than the closing price on Thursday afternoon, before details about any takeover offers had been disclosed.

Caesars said it has completed due diligence checks on the deal and expects if agreed that it will be completed in the second half of 2021 - subject to approval by shareholders and regulators.

It already owns a 20% stake in William Hill's US operations - a business which has exclusive rights to operate sports betting under the Caesars brand.

Caesars chief executive Tom Reeg said: "The opportunity to combine our land-based casinos, sports betting and online gaming in the US is a truly exciting prospect.

"William Hill's sports betting expertise will complement Caesars' current offering, enabling the combined group to better serve our customers in the fast growing US sports betting and online market.

"We look forward to working with William Hill to support future growth in the US by providing our customers with a superior and comprehensive experience across all areas of gaming, sports betting, and entertainment."

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William Hill's earnings from its traditional bookmaking business have been squeezed in recent months as the pandemic closed high street stores as well as curtailing sporting fixtures.

It has also been under pressure due to regulations cracking down on fixed-odds betting terminals at its shops, which it blamed for announcing 700 site closures last year.

Last month it said it was closing 119 more shops.

The company, founded in 1934, has been shifting focus towards online betting and expanding its US operations.

It currently employs about 8,000 staff in the UK, where it has more than 1,400 betting shops.