Knocking on Caesars’ door
The same day that Caesars Entertainment agreed to buy William Hill for £2.9bn ($3.7bn), 888 Holdings said it is interested in pieces of the acquisition that Caesars does not want. The comments from 888’s CEO Itai Pazner came as the company reported strong first half financial figures.
we are going to look at any asset that can be relevant for us”
Saying that his company is “in a good position to make acquisitions,” Pazner added regarding William Hill: “We are going to look at any asset that can be relevant for us, and within that list, if that opportunity comes our way that could be relevant for us.”
888 Holdings may very well get that opportunity, as Caesars has already made it known that it wants to sell off the non-US assets of William Hill. For Caesars, the attractiveness of William Hill is its US business unit, particularly mobile and online sports betting.
Prior to the acquisition, Caesars already owned 20% of William Hill US.
888 has soared this year
As mentioned, 888’s performance in the first half of 2020 is a primary driver of the company’s ability and desire to scoop up some of William Hill’s assets. Compared to the same period in 2019, this year’s first half pre-tax profits jumped 130% to $50.9m. Revenue shot up 37% to $379m.
The reason for the success is the COVID-19 pandemic. While the health crisis has hurt many sectors of the world economy, online gaming businesses have mostly thrived, as housebound people have turned to gaming to pass the time.
Pazner specifically singled out online poker as a vertical that “really caught us by surprise.” The number of new 888 poker players more than doubled during the first six months of 2020.
Old dance partners
Both 888 and William Hill courted each other a few years ago. In 2015, it was actually William Hill that was interested in acquiring 888, reportedly offering a deal worth around £750m ($1.14bn at the time). 888 did publicly confirm that it been approached by William Hill, but clearly nothing ever came of it.
The following year, the tables were turned, as 888 looked to buy William Hill. 888 Holdings teamed up with Rank Group in a bid that would have created a new company called, appropriately, BidCo. BidCo then would have offered a combination of cash and stock, valuing William Hill at approximately £3.2bn ($4.2bn at the time).
William Hill’s board of directors rejected the deal, saying that the price was not high enough. It also did not feel that a sale would “enhance William Hill’s strategic positioning or deliver superior value for shareholders compared against William Hill’s strategy.”