Tue, Oct 11, 9:59am by Staff Writer
British bookmaking behemoth William Hill and Canada’s Amaya, the owner of Pokerstars, are considering a merger.
Both companies have been seeking mergers or acquisitions in the past 12 months, with William Hill the subject of a takeover bid from 888 and Rank Group as recently as August.
Amaya, which run the world’s largest online poker business, and William Hill, which has a massive retail presence in the UK, but is battling a competitive market in the sports betting online space, have apparently had discussions over a merger of equals which would be worth around 7.1 billion Australian dollars.
“The potential merger would be consistent with the strategic objectives of both William Hill and Amaya and would create a clear international leader across online sports betting, poker and casino,” say the companies.
While superficially there are obvious synergies between the two businesses, there is scepticism over the direction of both companies, who have lost chief executives over the past few months.
William Hill and CEO James Henderson parted ways in July, while Amaya co-founder and chief executive David Baazov stepped away from the company in August.
Both companies also have issues in the share market at the moment with William Hill down 15 per cent in the past 12 months and Amaya down 23 per cent.
Amaya is valued at C$3.4bn, while William Hill has a market value of £2.5bn.
The other concern for both companies is that they are both facing regulatory challenges in their key markets.
Amaya is fighting a $870m fine against Pokerstars ordered by a judge in Kentucky in December 2015 over alleged activities that were deemed contrary to US laws against online gambling.
Amaya did not own Pokerstars at the time of the alleged infringement but has said it will “vigorously dispute any liability”.
William Hill is facing possible regulatory challenges in the UK with a likely crackdown on fixed odds betting terminals in betting shops.
The upsides, however, are clear. A combined London-listed business would derive 60 per cent of its revenues from online betting, and 40 per cent from betting shops in the UK and sports gambling within casinos in Nevada.
William Hill would get access to Pokerstars’ estimated 100 million customers, while there would be cost savings, which are estimated to be worth 163 million Australian dollars.
Just what any merger would mean for the Australian William Hill business is unknown, but expectations on the growth of that business have been significantly affected by the ban on Click To Call betting,
The global gambling sector is undergoing a massive consolidations phase with Betfair and Paddy Power merging in February and Ladbrokes and Gala Coral in the process of merging.
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