Another approval acquired
The Nevada Gaming Commission (NGC) has approved Caesars Entertainment’s $3.7bn acquisition of sports betting company William Hill. The approval moves Caesars one step closer to completing the transaction by its April 1 target date.
a domestic intent to sell William Hill’s international assets once the deal is complete
Caesars already owns 20% of William Hill and is intending to purchase the remaining 80%. CEO Tom Reeg spoke with the Nevada Gaming Commission about the deal on Thursday. Notably, he described Caesars as “a domestic company,” establishing his intent to sell William Hill’s international assets once the deal is complete.
Caesars began seeking the necessary regulatory approvals for the acquisition in Q4 2020. It has now received approval from the Nevada Gaming Commission, William Hill stockholders, and the US federal antitrust authorities. The last hearing necessary to finalize the deal will take place on March 31 in the Scheme Court.
Cohen raises monopoly issue
William Hill currently operates more than 120 sportsbook and kiosk locations across Nevada, meaning it would become a centerpiece of Caesars’ sports wagering operations if the deal goes ahead. Across the entire US market, the sports betting operator has a 29% share.
As a result, the NGC raised issues regarding the potential of a monopoly. Commission member Steven Cohen pointed to William Hill’s domination of the state’s sports betting market. In addition to its 12 sports betting operations at Caesars’ Nevada properties, William Hill offers sportsbooks at Circus Circus and Sahara on the Las Vegas Strip.
46.1% of Silver State sports wagers now go through William Hill
Last summer, William Hill increased this presence even further after acquiring rival company CG Technologies. The operator took over sports betting at the Tropicana, Palazzo, Venetian, and Cosmopolitan as a result. According to Cohen, 46.1% of Silver State sports wagers now go through William Hill sportsbooks, with the operator owning 64% of the state’s sports betting locations.
Although the NGC ultimately approved the William Hill takeover, Cohen warned that another acquisition “could trigger” monopoly concerns.
HBK to contest merger
Earlier this month, Caesars announced its intention to close the William Hill deal by April 1. That date could face a setback, though, after investment management firm HBK Investments declared its intention to challenge the merger earlier this week. This has already pushed back the deal’s Scheme Court Hearing from March 30 to March 31.
In a company statement, HBK raised issue with a lack of clarity surrounding the deal outlined in the scheme documents. It said: “Our opposition is based upon our strongly held belief that shareholders voting on the scheme did so without information which would have allowed them to weigh up its true merits.”
The company’s concerns rest specifically on a joint venture agreement between William Hill and Eldorado Resorts, which later completed a reverse-merger with Caesars in a $17.3bn deal. HBK argues that a provision in the scheme documents overstates Caesars’ ability to restrict acquirers of William Hill.
In response, William Hill has rebutted HBK’s claims, noting that 86.64% of its shareholders voted to approve the deal.