The operator of the Las Vegas casino Caesars Palace has confirmed it is in “advanced discussions” about a possible £2.9bn takeover bid for the UK bookmaker William Hill.
Caesars Entertainment said it had offered 272p a share in cash after scrutinising the company’s books.
The US hotel and entertainment firm said the board of William Hill had indicated the “possible cash offer is at a price level that they would be minded to recommend to William Hill shareholders”.
Should a firm offer be made and receive the go-ahead from shareholders and anti-competition authorities, the deal would be expected to complete in the second half of next year, Caesars said. The US company indicated it would terminate its joint venture with William Hill in the US if interest from private equity group Apollo Management International crystallises into a successful bid - a statement that helped push down William Hill’s share price on Monday.
Tom Reeg, the Caesars chief executive, 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.”
William Hill declined to comment.
Shares in William Hill fell almost 12% to close at 275.9p on Monday after surging by more than 40% on Friday, when the gambling firm said it had received separate cash proposals from Caesars and Apollol.
Caesars estimates that the enlarged sports and online gaming business over there could generate between $600m and $700m in revenues next year, tapping into a market that could grow to $30bn-$35bn, it said, quoting analysts.
Caesars, founded in Reno, Nevada, in 1937, is one of the largest casino operators in the US and employed 80,000 people at the end of 2019. Its venues are run under the brands Caesars, Harrah’s, Horseshoe and Eldorado. It is best known for running the Caesars Palace hotel on the Las Vegas strip, famed for hosting performers such as Frank Sinatra, Judy Garland and Elton John, as well as top boxing matches.
Like its UK rivals, William Hill is expanding in the US market, where the supreme court reversed a decades-old ban on sports betting in 2018. It has been struggling in the UK and recorded pre-tax losses in 2018 and 2019 after curbs on fixed-odds betting terminals were introduced.
The company has also been hit by the coronavirus pandemic. The cancellation of big sports events around the world initially led to a big drop in betting activity but the return of sporting competition such as Premier League football on 17 June meant much of the revenue affected by lockdown was delayed rather than lost.
William Hill decided not to reopen 119 branches closed during the coronavirus lockdown but few redundancies were expected as the majority of staff were redeployed. It is left with 1,414 UK branches and employs 12,500 people worldwide, including 8,000 in the UK.