The US casino operator Caesars Entertainment has agreed a £2.9bn takeover of the British bookmaker William Hill.
The companies announced on Wednesday that Caesars would pay £2.72 per William Hill share in cash, a premium of more than a quarter compared with the price before the US company’s interest was first reported last week.
The deal, which must be agreed by 75% of William Hill shareholders, was unanimously recommended by the UK company’s directors. It came after two rival bids by the US private equity group Apollo were turned down.
The takeover will give Caesars, the operator of the Caesars Palace casino in Las Vegas, access to the burgeoning US sports betting market. Caesars also owns various casinos in the UK.
Sports betting was illegal across the vast majority of US states until a 2018 supreme court decision overturned a federal ban, firing the starting gun on a race between bookmakers to target one of the world’s biggest potential markets.
The size of the online opportunity has given US betting companies a lifeline during the coronavirus pandemic, with the value of shares in Caesars surging from lows of almost $6 in the March panic to $54 on Tuesday evening. Caesars previously said the takeover could allow it to make between $600m and $700m in revenues next year in online and sports betting.
Roger Devlin, William Hill’s chairman, said the offer was at “an attractive price for shareholders” but added that it reflected the “risk and significant investment required to maximise the US opportunity, given intense competition in the US and the potential for regulatory disruption in the UK and Europe”.
He said it would be “very much business as usual” for William Hill workers for now. Caesars plans to sell William Hill’s UK and European branch networks, which have struggled before and during the pandemic under increased regulatory pressure to tackle problem gambling. William Hill announced the closure of 119 UK branches in August.
Tom Reeg, the chief executive of Caesars, said: “William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to better serve our customers in the fast-growing US sports betting and online market.”