William Hill takeover bid collapses

An ambitious £3.4bn bid for William Hill has collapsed after the bookmaker refused to open talks with suitors Rank Group and 888 over what would have been a highly-complex, three-way deal.

Rank, the owner of Grosvenor casino and Mecca bingo halls, and online gambling company 888 made two offers for the bookie, of 394p-a-share and 364p, but both were dismissed by William Hill as too low and “highly opportunistic”. In the light of William Hill’s refusal to engage, the pair have dropped their approach, which had been dogged all along by stock market scepticism the deal was too complicated to pull-off and required too much debt.

A Takeover Panel deadline requiring the bidders to make a formal offer or walk away was due to expire on Sunday.

“We strongly believe that the transaction would have created significant value for all three sets of shareholders,” said Henry Birch, the boss of Rank. Itai Freiberger, 888’s chief executive, added that he was “disappointed” William Hill “did not share our vision”.

The mooted deal would have involved Rank merging with 888 to buy the bookie. Mr Birch would not comment on whether a deal between the two bidders was still on the cards, although he did say that “we’ve enjoyed working with 888”.

William Hill had publicly clashed with the bidders and disputed the value of the offers they had submitted. Gareth Davis, the bookie’s chief executive, said today that it would focus on its stand-alone turnaround strategy, adding that Rank and 888’s offer “fell down on value, risk, strategy and leverage”.

In a fillip to investors, he also said the company had enjoyed a “good start” to the second-half of the year and that annual operating profits were now expected to be at the top end of the £260m to £280m range.

However, William Hill remains isolated. Rivals Ladbrokes and Corals are merging and Paddy Power and Betfair have combined to create a gambling giant.

There has been speculation that CVC, the private equity giant that used to own William Hill and now owns Sky Bet, could make a bid for the bookie. But Berenberg analysts said today that they doubted William Hill would draw another suitor, arguing that “a private equity fund would need to re-leverage” the company “very substantially”.

William Hill shares, which had faded in recent days amid speculation a deal would fail, fell a further 4.7p to 303.1p. 888 rose 4.75p to 205p and Rank slid 2.3p to 221.6p.

CVC move for Italian gaming and payments operator Sisal

CVC Capital Partner who own already Sky Betting & Gaming have now moved again to acquire 100% equity stake in Italian gaming and payments operator Sisal Group. The offer will include Capital Partners assuming Sisal’s huge debt of €960 million along with placing a €1 billion offer for the entire company.

The move has surprised many observers as Sisal in its 2015 report that it had a loss of €40 million on earnings of €182 million with whole group revenues of €787 million.

The equity firm are not afraid of big deals after the December 2014 purchase from BskyB of Sky Betting & Gaming for £800 million and then Tipico, the German sports betting operator having a controlling share in the giant firm for €1 billion.

However the Sisal bid still has to be approved by regulators.

Giampiero Mazza, Partner and Head of CVC’s Italian team, said: “We are very pleased to have the opportunity to invest in Sisal. The Company is a well-diversified entertainment business with a historical brand in Italy and strong market positions across gaming, lotteries, betting and convenience payments.

“Under its previous shareholders and the management team led by Emilio Petrone, Sisal was able to grow and reshape its business perimeter thorough a period of difficult macro conditions and regulatory uncertainty. Sisal today is ideally positioned to capture growth in a number of areas.

“We look forward to support Emilio and his team to consolidate Sisal’s leadership in the payments space, continue to develop its online gaming and betting platform and further innovate its proposition in proximity retail.”

Emilio Petrone, CEO of Sisal Group, added: “I would like to congratulate the entire CVC Milan Team for finalising a great acquisition. Sisal, celebrating its 70th anniversary, is a very important Italian company that is enjoying a period of fantastic growth and overall results. I am confident that with CVC, we will make a formidable team enabling Sisal to fully exploit its potential, becoming even stronger and more competitive. Personally, I am thrilled to lead this new, exciting phase in the company’s history. I want to thank Apax, Permira and Clessidra for the consistent and valuable support they have given to me and the company over the last years”.

CVC takes control of £800m Sky Bet

CVC Capital Partners is to spend a potential £720m to buy a controlling stake in online bookmaker Sky Bet. Under the agreement, Sky will receive £600m on completion of the deal, and further deferred and contingent payments of up to £120m, while Sky will retain an equity stake of 20% in Sky Bet, with which it has entered a long-term brand licence agreement.

The broadcaster said that the sale ‘crystallises value’ for Sky that has been created in Sky Bet, while the price represents a multiple of approximately 15x EBITDA for the 12 months ended 30 June 2014, reflecting Sky Bet’s record of strong growth and high cash generation.

Sky chief executive Jeremy Darroch said: “In the last ten years, we have successfully grown Sky Bet from a start-up to one of the leading online betting and gaming companies in the UK. This transaction will allow us to focus further on the substantial growth opportunities in our core international pay TV business while realising significant value for our shareholders.”

The acquisition includes Sky Bet, its sports betting business; Sky Vegas & Sky Casino, its casino gaming businesses, Sky Poker and Sky Bingo, and Oddschecker, the UK’s leading odds comparison site. The deal is subject to regulatory clearances in the UK and Ireland and is expected to be completed in the first three months of 2015.

The Sky Bet management team, under the leadership of managing director Richard Flint, will remain with the business under the new ownership structure with all Sky Bet’s employees moving across into the new entity. The business will remain headquartered in Leeds.

Flint said: “Over the last 7 years, Sky Bet has grown rapidly to become one of the UK’s leading online betting and gaming operators, achieved through the hard work of our employees and the valuable support of Sky and Sky Sports. Looking forward, we have exciting growth opportunities, both in the UK and internationally. Today’s transaction brings in CVC as a new majority investor who will support us in the exciting next phase of our development, and retains the benefits of Sky’s and Sky Sports’ continuing involvement. CVC brings a broad international network, has an excellent track record of building businesses, as well as valuable experience in the betting & gaming sector, through previous investments in companies such as William Hill and IG Group.”

Rob Lucas, managing partner of CVC, said: “We are delighted to have agreed to acquire a controlling stake in Sky Bet. Richard Flint and his team have built a fantastic business, which is a leader in the fast growing mobile and online, betting and gaming markets. The partnership between CVC and Sky will provide a strong platform to support SkyBet’s ongoing success at this exciting point in its development.”