888 Holdings expects delay in finalizing acquisition of William Hill

Posted: Jan 3, 2022, 8:55 a.m.

Last update on: January 3, 2022, 9:10 a.m.

888 Holdings is expected to complete its acquisition of the non-US assets of William Hill during the first quarter of the year. Those plans have now changed, with second quarter completion more likely.

William Hill Shop
One of the many William Hill stores at the center of the company’s acquisition by 888 Holdings. The deal was expected to be finalized in the first quarter, but was delayed. (Image: The weather)

888 finalized its deal to purchase the non-US assets of William Hill from Caesars Entertainment last September. He then began the long process of obtaining all the necessary confirmations, approvals and other paperwork associated with the US $ 3 billion deals.

At the time, he expected to be able to complete the process early this year. This seemed to be more possible after 888 received antitrust and pre-completion approval from regulators in November.

Now things have slowed down a bit. A company update at the end of 2021 indicated that Q2 2022 was the new target.

The reason for the delay was not provided. 888 is in the process of drafting a circular and prospectus that will describe the completion of the acquisition, as well as details of a plan to raise capital to help cover costs. It is conceivable that the preparation of these documents will take longer than expected.

888 can control a lightened William Hill

William Hill announced in November that it was closing three online casino brands. There is also – although unconfirmed – the possibility of selling some of its retail betting shops.

Apollo Global Management, businessman Fred Done and BoyleSports have already expressed an interest in buying them if that were to happen. 888, since its inception, has been primarily an online betting operator. He may not want to deal with the 1,414 betting shops operating under the William Hill name in the UK. However, 888 CEO Itai Pazner also hinted that land-based assets could be a smart segment to own.

It is possible that the sale of commercial land plays a role in the delay in the acquisition. Perhaps negotiations are already underway and the value of such a deal could play a role in the final prospectus prepared by 888.

In mid-December, 888 announced that it would sell its B2C and B2B bingo business to Saphalata Holdings. This, the company explained, would allow it to focus on its core business. It would also allow him to recover around $ 50 million once the transaction is completed.

This all-cash deal could also play a role in how 888 does its fundraising exercise.

William Hill’s European assets performed well in 2020. Across its betting shops and online operations in Spain, Italy and the Nordic region, its total revenue was $ 1.56 billion . Of that amount, roughly $ 1.08 billion came from digital operations.

This produced EBITDA (earnings before interest, taxes, depreciation and amortization) of US $ 211.34 million. 888, during the same period, achieved sales of US $ 814 million and EBITDA of US $ 156 million.

The purchase of the assets of William Hill will almost double the size of 888’s operations. But there are many moving parts that make the transaction tricky.