Shareholders of British bookmaker William Hill (OTC:WIMHY) voted Thursday in favor of a takeover offer by Caesars Entertainment (NASDAQ:CZR). The approval comes less than two months after the proposal became public.
The sportsbook operator’s board endorsed the $3.69 billion all-cash offer in late September. Over 86 percent of the votes submitted today were in favor of the deal.
We continue to work towards satisfying the remaining regulatory conditions and look forward to completing the transaction next year and integrating William Hill US into our Caesars sports betting and iGaming franchise,” said Caesars CEO Tom Reeg in a statement.
The acquisition, the first by “new Caesars,” is slated to close in the first quarter of 2021, marking a quick time line from William Hill confirming receipt of takeover overtures in late September.
Speculation swirled dating back to Summer 2019 regarding the fate of the target’s online casinos and sports betting units. Reeg said it was possible the businesses could be spun off to unlock shareholder value.
When the combined company resulting from the billion-dollar merger delivered its first earnings report a few months ago, Reeg reiterated that the iGaming and sports wagering businesses are growing. He indicated a decision on how to proceed would come before the end of 2020. That sparked talk in the analyst community that Caesars and William Hill should come together in a joint venture, where 20 percent of the equity would be spun off to the public.
The UK-based company entered the equation via a previous agreement with Eldorado, whereby William Hill is entitled to run the casino operator’s domestic sportsbooks, including those gained via acquisitions.
The British company also has a history with “old Caesars,” as the latter made a $3.8 billion offer for William Hill in 2019.
With the US sports betting business growing at a feverish pace, and with William Hill holding some valuable European assets, the company attracted multiple suitors. But Reeg used leverage to compel the bookmaker to accept the Caesars offer, saying the US accord between the two companies would be scrapped if the British firm accepted another proposal.
The transaction will create the largest sportsbook operator in the US. It will also significantly bolster Caesars’ online/mobile footprint, as William Hill is the third-largest provider of internet sports betting services in the country.
By market share, William Hill is the top sportsbook company in at least three states in which it’s licensed to conduct business — Iowa, Nevada, and Rhode Island.
After the deal is complete, Caesars Palace properties will retain that branding for retail books. But the William Hill name will be used at the buyer’s other sports betting locations.
Given Caesars’ desire to focus on its domestic business, it’s likely the company will divest William Hill’s European unit after the purchase is completed. That transaction could also include Caesars’ UK casinos. William Hill’s European business is valued at $2 billion to $4 billion.