UK Court Approves Caesars’ £2.9bn William Hill Takeover

Caesars Entertainment expects to finally close its takeover of William Hill this week after receiving approval from a UK court. [Image:]

A final approval

Caesars Entertainment first announced its agreement to acquire UK-based sports betting operator William Hill for £2.9bn ($4bn) in September last year. That deal should finally close this week after a belated approval by High Court of Justice judges in England and Wales following a scheme hearing.

Both Caesars and William Hill confirmed the High Court of Justice’s decision on Tuesday. The acquisition was initially due to close on April 1, but a legal challenge from two hedge funds resulted in a three-week delay to the court approval.

values William Hill’s 1.08 billion shares at £2.72 ($3.80) apiece

Caesars said it now expects the deal to close on Thursday this week with the suspension of trading in the British sportsbook operator’s shares. The deal itself values William Hill’s 1.08 billion shares at £2.72 ($3.80) apiece.

The legal challenge

The deal’s scheme court approval was initially due March 30, paving the way for the acquisition to close at the beginning of this month. However, a legal challenge from GWM Asset Management and HBK Capital Management delayed the court’s decision.

The companies raised issue with the clarity of documents outlining the details of the planned acquisition to shareholders. In a statement explaining its position, HBK argued that shareholders voted “without information which would have allowed them to weigh up the deal’s true merits.”

In particular, HBK pointed to a provision in the scheme documents which supposedly overstated Caesars’ ability to restrict counterbidders of William Hill. The provision related to a joint venture agreement between William Hill and Eldorado Resorts. The latter merged with Caesars in July 2020 in a $17.3bn deal.

The investment management funds wrote to Caesars and William Hill ahead of the hearing. They reportedly asked for a revote on the deal, despite shareholders voting overwhelmingly in favor of the takeover in November last year. Over 86% of William Hill shareholders backed the acquisition.

US sports betting focus

Caesars has revealed that the main aim of the takeover is to capitalize on William Hill’s US-facing sports betting business and technology. The US casino operator intends to sell any remaining assets.

A Tennessee launch in March added the eleventh state to William Hill’s US presence

William Hill first received a US sports betting license for Nevada in 2012, and has since launched its sportsbook in multiple states across the growing market. A Tennessee launch in March added the eleventh state to William Hill’s US presence. Its other active jurisdictions include Virginia, Iowa, Colorado, and New Jersey, among others.

The operator also reported strong US net revenue gains in 2020, despite the impact of the coronavirus pandemic. Revenue was up 32% for the entire year, going up 121% for the final quarter of 2020. The company attributed this US growth to the performance of online wagering and the benefit of multi-state expansion, with its sportsbook launching in five new states throughout the year.

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