888 Holdings Mulling Run at William Hill European Assets

888 Holdings is considering a bid for William Hill’s (OTC:WIMHY) European business. The properties are likely to be divested when Caesars Entertainment (NASDAQ:CZR) completes its $3.69 billion takeover of the British bookmaker.

Caesars’ acquisition of the sportsbook operator is in its final stages and is likely to be finalized in the second quarter. The Las Vegas-based casino giant has made clear it only wants William Hill’s US assets. It intends to sell the international business soon after the transaction is completed.

In an interview with The Times, 888 CEO Itai Pazner said his company is considering William Hill’s internet betting business in Europe, calling it “an interesting asset for us.”

It’s coming up relatively soon and we’ll definitely be looking at it,” said Pazner.

Estimates vary on the value of the UK-based company’s European operations. But the floor is projected to be $2 billion, with a ceiling as high as $4 billion. That means Caesars will be able to significantly defray the cost of the takeover with the sale of just part of William Hill.

888 Likely to Face Competition

While Caesars wants William Hill to bolster its status as a domestic iGaming and sports wagering behemoth, other companies see plenty of value in the international operations that the casino operator is planning to jettison.

Those rumors don’t take into account that 888 itself could be a target. Reports surfaced last month that Las Vegas Sands (NYSE:LVS) could make a run at the Israeli company as a way of finally getting into the fast-growing sports betting industry.

Pazner told The Times his company is focused on growing, and that if another party makes an offer for 888, “If it comes, we’ll deal with it.”

UK’s Betting Shops

Part of William Hill’s superior brand recognition in the UK is derived from its 1,400 betting shops. However, the company shuttered 119 of those venues last year, and the message in the sports wagering industry is clear: Online, not brick-and-mortar, is where the better margins are.

Pazner said it’s too early to tell what 888’s plans for the shops would be if it’s successful in winning William Hill’s European business. Without going into detail, he said there’s some value in those locations.

For any bidder interested in William Hill’s non-US operations, Caesars could throw a curveball at those plans, because the operator is rumored to want to part with its seven England casinos as part of divestment of the Europe sportsbook business. Should that happen, bidders would have to decide if they find those venues desirable, and it could be a win for Apollo because the private equity firm has experience operating casinos.