888 Holdings Refused $890M Playtech Takeover Offer

William Hill owner 888 Holdings Plc (OTC: EIHDF) reportedly turned away a nearly $890 million takeover offer from Playtech (OTC: PYTCF) in July.

Citing unidentified sources, The Sunday Times reported 888 and Playtech discussed a deal in July with the suitor potentially eyeing combining the target with its Italian betting unit, Snai, and then spinning off its business-to-business unit.

DraftKings reportedly abandoned negotiations with 888 shortly after FS Gaming Investments, an investment group led by former GVC CEO Kenny Alexander, revealed it took a 6.57% stake in 888. That move by Alexander stoked regulatory concern as the Great Britain Gaming Commission (GBGC) announced William Hill’s license was under review because of the supposedly questionable fashion in which GVC divested a Turkish business under Alexander’s leadership.

888 May Have Been Smart to Accept a Deal

Based on current British pounds/US dollars exchange rates, Playtech’s offer for 888 valued the target at $889.65 million.

888 and Playtech have partnered with the latter, running internet casino games on the former’s platform. Last year, the two parties expanded their arrangement into the fast-growing US iGaming market.

“This agreement will enhance the overall player experience by offering more entertaining and dynamic games, which is a key part of our content and product leadership strategy,” said Howard Mittman, US division president for 888, in a statement at the time. “We look forward to welcoming Playtech’s content and growing our partnership together.”

888 Trying to Go It Alone

While 888 has long been the subject of takeover speculation, and it’s clear that some competitors have expressed interest in buying the company, the operator’s management appears intent on trying to survive on its own, at least for the time being.

The gaming company concluded 2022 with a soaring debt-to-capital ratio and $3.55 billion in outstanding liabilities. Still, it doesn’t have to contend with debt maturities until 2027, indicating it has some breathing room and doesn’t need to sell itself over the near term simply to rid itself of debt.

On the other hand, 888’s low market capitalization and the strong brand recognition of William Hill among European bettors could compel other suitors to make takeover offers.