888 shareholders greenlight acquisition of William Hill's international assets, to complete by end of June

British gambling heavyweight 888 Holdings is set to complete its purchase of William Hill’s international assets from US casino and gaming giant Caesars Entertainment by the end of June, the company announced on Monday.

The news was delivered following an extraordinary general meeting held in London, in which shareholders granted their seal of approval to the proposed takeover. A total of 99.73% of all votes -nearly 307 million- were cast in favor of a resolution outlining the transaction, allowing 888 to now move forward with the nine-month long deal.

“We are delighted with the support of our shareholders for our proposed acquisition of William Hill and would like to thank them for their continued, constructive engagement as part of this process,” commented Lord Mendelsohn, Non-Executive Chairman of 888 Holdings Plc.

“We look forward to completing this transformational acquisition at the end of June, creating a global online betting and gaming leader through the combination of two highly complementary businesses and two of the industry’s leading brands,” he added.

Completion of the acquisition, and the subsequent re-admission of the entire share capital of the company for trading on the London Stock Exchange, is expected to occur “on or around June 30, 2022,” with further updates to be made “in due course.”

Las Vegas-based Caesars first bought British bookmaker William Hill in a $4 billion deal completed in April 2021 -one of the largest mergers within the gambling industry in recent years- and then agreed to sell its non-US assets to 888 for £2.2 billion ($2.88 billion). But last month, 888 announced it would be paying a smaller price than the one initially announced last September.

Enterprise value has now been reduced to £1.95 - £2.05 billion ($2.55 - $2.68 billion), 888 Holdings informed in an acquisition update in April. The revised terms of transaction reflect “the change in the macro-economic and regulatory environment” since the initial announcement of the deal last year, as well as “compliance factors impacting the WH business.”

William Hill Group is currently being subjected to an ongoing license review, and addressing certain action points by the UK Gambling Commission, in relation to its social responsibility and anti-money laundering obligations. This follows a compliance assessment conducted by the regulator in July and August 2021.

Cash consideration (equity value) payable to the seller at closing has been reduced from £834.9 million ($1.09 billion) to £584.9 million ($765.03 million). The updated figure is nearly 30% -or £250 million- below the previously agreed terms. Shares in the London-listed business soared nearly 30% at the time of the announcement.

Despite potential penalties William Hill could face regarding its license review, 888 said its board of directors “continues to believe that the acquisition represents a transformational opportunity” for the group to significantly increase its scale, further diversify and strengthen its product mix and “build leading positions across several of its key markets.”

The combination of 888 and William Hill International is expected to deliver “significant operating efficiencies,” including pre-tax cost synergies “of at least £100 million ($130.83 million). The enlarged group will be “strongly growth-oriented,” benefitting from “a clear scale advantage” and strong product and geographic diversification.

888 Holdings expects multiples of approximately 7.5x normalized EBITDA, and 5.7x1 on a post-synergy basis for William Hill for the 12 months ending December 2021. Additionally, the move means 888 will also take hold of William Hill’s retail network of 1400 UK betting shops, plus popular online gaming brands Mr Green and Redbet.