Ralph Topping joins Parvus in opposing William Hill-Amaya merger

William Hill is in negotiations with Amaya, which runs PokerStars, the world’s largest online poker business, over a tie-up that would create an “international leader across online sports betting, poker and casino games”.

On Thursday night, the hedge fund Parvus Asset Management, which with a 14.3 percent stake is William Hill’s biggest shareholder, released an open letter saying it would oppose the combination. Parvus criticiZed the proposed deal, saying it had “limited strategic logic and would destroy shareholder value”, and called on William Hill to consider putting itself up for sale.

Topping retired as William Hill chief executive in 2014 after eight years at the helm, widely praised for his leadership when it was the UK’s largest retail bookmaker by number of shops and began moving into online betting.

Topping told the Financial Times he endorsed the views of Mads Eg Gensmann and Edoardo Mercadante, Parvus co-founders, calling the two men “quality people and very good shareholders”, who had been supportive of the company during his tenure.

“I fully support what Parvus are doing, because they are good people,” said Mr Topping. “When this deal was announced I was left scratching my head. Both [Amaya and William Hill] have a lot to sort out in their own business. I’m very anxious on the future of William Hill.”

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Mr Topping urged William Hill to call off the merger talks, saying there would be huge ramifications for the future of its chairman Gareth Davis and interim chief executive Philip Bowcock who had led the discussions with Amaya

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William Hill did not respond to requests for comment.

People close to the transaction said Amaya and William Hill were holding crisis talks on Friday, while the companies continued their due diligence over the potential merger.

One person with knowledge of the talks said: “You would hope others will behave more rationally than Parvus are behaving. It’s not necessarily the death of the transaction, but it depends on how the other [William Hill] shareholders behave.”

William Hill and Amaya have been seeking a transformational deal in response to a rapidly consolidating sector. Rivals Betfair and Paddy Power joined forces in March, Ladbrokes and Gala Coral are in the final stages of finalising their merger. GVC Holdings, owner of Sportingbet, bought Bwin.party last year after outbidding 888 Holdings.

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The two gambling companies argue there is sound industrial logic behind a combination

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The merged group could provide an opportunity to cross-sell to customers with William Hill, for example, gaining access to Amaya’s 100m online poker customers.

In August, William Hill rebuffed a £3bn takeover bid from a consortium of Rank Group and 888 Holdings, which the board claimed was a deal based on “risk, debt and hope”.

The Parvus co-founders said the proposed reverse takeover of Amaya had similar flaws as it was a “complex, cross-border” deal that would increase leverage by £2.2bn.

Amaya said: “The Parvus letter contains inaccuracies that can be dispelled through reading Amaya’s public filings, which will attest to the high quality, consistent profitability and stable growth prospects of our business. Further comment on any potential agreement is best provided if there is a proposed transaction put forward by Amaya’s Board.”