UPDATE: Apollo Global Management eyes William Hill betting shops

Apollo Global Management is drawing up a bid for William Hill’s betting shops and other non-US assets once the bookmaker’s takeover by Caesars Entertainment goes through.

The private equity firm, which wants to back the incumbent management, had originally approached the bookmaker about a full takeover but opted to step back after a rival approach from Caesars Entertainment.

The Las Vegas-based casino operator has since made a recommended bid for William Hill worth £2.9 billion, or £3.25 billion including debt, but has made clear that it only wants the group’s American betting operations and will sell the rest of the assets, valued by Numis at about £1.2 billion.

It is understood that Caesars, which has a 20 per cent stake in William Hill’s US operations, is likely to include its own British business in the sell-off. Caesars UK has seven casinos in Britain, including the Playboy Club and Empire Casino in London.

Apollo, one of America’s biggest buyout firms, is believed to be keen to back the William Hill management team, led by Roger Devlin, the chairman and a former Ladbrokes executive, Ulrik Bengtsson, its chief executive, and Matt Ashley, the chief financial officer.

The William Hill operations that Caesars wants to sell include 1,400 UK betting shops, online operations and other European operations. Betfred, a rival bookmaker that has built a 6 per cent stake in William Hill, is thought to be interested in its shops but Caesars is thought to favour selling the retail and digital operations in one block.

William Hill, which was founded in 1934, is one of Britain’s biggest gambling groups, with about 11,500 employees worldwide. It is among the leaders in the nascent American market for sports betting, which is slowly being legalised across the country.

The takeover bid from Caesars Entertainment is due to be voted on by shareholders in two weeks and because it is being structured as a scheme of arrangement must be approved by investors speaking for 75 per cent of the votes cast.

The William Hill share price, which rose by ¾p to 273¾p, has remained just above the 272p-a-share offer price on hopes by hedge funds that they can secure a “bump” in the price of a few pence. Analysts pointed out, however, that since the deal was struck William Hill’s betting shops had been forced to close again by new lockdowns and the expected election of Joe Biden as US president was seen as increasing the regulatory risks. Regulatory costs are also going up in Germany. 

Although Apollo is known to be keen to mount a bid for the assets Caesars does not want, it cannot join forces with management or enter negotiations until the takeover of the company has secured shareholder approval.

None of the parties involved would comment.

Source: The Times