Playtech claim boost in value as William Hill agree Sportingbet dealDecember 22nd, 2012 / lee
William Hill may well be moving heavily into the Australian online betting market following an agreement to buy Sportingbet in a £485 million deal, but could there be complications. The ongoing saga of the proposed takeover deal took a new turn, with Playtech, a joint-venture partner of William Hill Online stated that the takeover of Sportingbet “would add considerable value to William Hill Online.” This could affect the buyout that Britain’s biggest bookmaker wanted to make of the software company Playtech, in order to take full control of William Hill Online.
During the proposed takeover of Sportingbet by William Hill and GVC Holdings in a joint bid, the Takeover Panel overseeing the deal pushed the deadline back four times as the parties wrangled to try and come to a settlement. WIlliam Hill, before the latest deadline had agreed a recommended cash and shares offer for Sportingbet, valuing the Sportingbet share at a price of 56.1p. The Sportingbet board were happy to accept the deal, an offer which was lower than a previous bid because of the fall in profits for Sportingbet.
The deal sees William Hill take Sportingbet’s impressive Australian operation with an option to acquire its Spanish business as well. The smaller partner of the deal, GVC Holdings, will take over the aspects of the Sportingbet business which operate in less clear regulations across the world. “This is bang in line with our strategy. More online revenues, more international revenues and more regulated revenues,” William Hill chief executive Ralph Topping said. “We are laying the foundations today of success for the next 30 years,” said Topping, who has been with the company four decades.
The deal, is another important component in the world wide expansion of William Hill, who purchased three sports books in Nevada, USA earlier this year. Along with their other expansion deals, William Hill have initiated a process to buy out Playtech’s share in them. Playtech have a 29 percent stake in William Hill Online and it is because of this that the software group, who were not part of the deal to purchase Sportingbet, are making claims that William Hill’s deal for Sportingbet will boost the value of its stake. Analysts had previously said that the stake which Playtech have in William Hill could be worth around £400 million.
Playtech also stated that William Hill and GVC Holdings would be obliged to offer to sell the Sportingbet operations to them within six month completion of the deal. So William Hill’s proposed buyout of Playtech could cost them more than ever anticipated. Earlier this year, William Hill asked a group of banks to value the software firm’s stake in the William Hill Online joint venture and the results of that are expected to be finished in February of 2013.
Playtech today argued that a takeover of Sportingbet “would add considerable value to William Hill Online” and that it “expects that the potential contribution of the Sportingbet activities and associated synergies and cost savings will be taken into consideration as part of any valuation”.
William Hill of course refuted Playtech’s claims saying that “Playtech have no rights to a business that is not part of William Hill Online and therefore this has absolutely no effect on any valuation of William Hill Online.”