William Hill and Caesars held aborted merger talks for USD 7.57 B

William Hill held talks with Caesars Entertainment last year about a potential £6 billion (USD 7.57 B) merger. The negotiations, which were first revealed by The Sunday Times, attempted to discuss a cash-and-shares deal but ultimately failed over a disagreement on price, leading Caesars to switch its attentions to Eldorado Resorts.

The deal would have seen the FTSE 250 bookmaker swallowed up by Caesars Entertainment. The talks were undermined when Caesars warned in August of falling sales in Las Vegas, and finally fell apart over price, according to that UK newspaper.

However, Eldorado owns about a fifth of William Hill’s American business, prompting speculation that a future relationship between Caesars and the British company is not out of the question. Deutsche Bank analyst Carlo Santarelli previously said the likelihood of an Eldorado Resorts Caesars Entertainment pairing was high and that a transaction would be positive for both companies.

A deal with Caesars, which has 53 casinos in 14 states and overseas, would have created a gambling giant worth £6 billion, based on Friday’s share prices. Caesars, which has a market value of $5.9 billion, has been under pressure from investor Carl Icahn to strike a deal. In March, it was revealed that the company was in merger talks with Eldorado.

Last year, the US loosened federal sports betting laws, just as the UK government cracked down on Fixed Odds Betting Terminals (FOBT) via a £2 staking limit, effective from April 1. This regulatory change has sparked a wave of M&A activity in the gambling sector as high street bookies try to offset declining FOBT sales by advancing into a liberalized US market.

Paddy Power merged with Betfair in 2015 while GVC completed its acquisition of William Hill rival Ladbrokes Coral last year. William Hill also found itself the subject of advances from Rank and 888 in 2016, leading it to try, and fail, to merge with Canadian group Amaya, now known as The Stars Group.

At market close on Friday shares in Las Vegas-based Caesars were adrift of the yearly high of $12.55 at $8.79 while shares in William Hill closed at 134p, close to a 12 month low of 130p.