Caesars agrees £2.9bn William Hill takeover - but will sell off UK betting shops

30 September 2020, 06:56 | Updated: 30 September 2020, 10:07

US casino giant Caesars Entertainment has agreed to buy William Hill for £2.9bn - but plans to spin off the UK business shortly after the deal completes.

Caesars is targeting the London-listed firm's US operations, in which it already has a 20% stake, and will seek new owners for the business in the UK and other parts of the world.

Founded in 1934, William Hill employs 11,500 globally including around 8,000 people in the UK, where it operates more than 1,400 betting shops.

The bookmaker's board judged that the 272p a share US offer - lower than some in the market had hoped for - was a better bet than any alternative future plans or rival bids.

It took into account risks including deeper regulation - at a time when it has already shut down hundreds of betting shops due to a crackdown on gambling machines.

Another worry is whether the coronavirus pandemic will mean long term damage, with sports events curtailed, shops facing potential restrictions and consumer confidence taking a further knock.

Caesars said it planned to seek alternative owners for the non-US part of the business, which it "intends to implement in the short term following completion of the acquisition".

The announcement of the takeover - which remains subject to shareholder approval - came with a pledge that Caesars would maintain existing employee terms and conditions until the end of 2022.

William Hill chairman Roger Devlin said its board "believes this is the best option for William Hill at an attractive price for shareholders".

He added: "It recognises the significant progress the William Hill group has made over the last 18 months, as well as the risk and significant investment required to maximise the US opportunity, given intense competition in the US and the potential for regulatory disruption in the UK and Europe."

Tom Reeg, chief executive of Caesars, 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."

The announcement comes two days after Caesars said it was in "advanced discussions" over a takeover of the UK firm.