William Hill to exercise William Hill Online call option

 

British bookmaker William Hill is set to spend approximately £424 million in order to exercise a call option and take full control of its William Hill Online joint venture.

 

The London-based firm established William Hill Online in partnership with gambling software designer and supplier Playtech Limited in 2008 with its partner holding a callable 29 percent stake in the business.

 

William Hill began a formal evaluation process of William Hill Online in November and revealed that this process has now been completed with the proposed purchase price representing a multiple of 9.3 times the 2012 earnings before interest, tax, depreciation and amortisation of William Hill Online.

In order to raise funds for the acquisition, William Hill will issue approximately two ordinary shares for every nine in existence at a purchase price of £2.45 each to bring in around £375 million while additionally exercising a bridge credit facility worth £50 million.

 

“William Hill Online has consistently delivered strong net revenue growth since it was formed in December of 2008,” said Ralph Topping, Chief Executive officer for William Hill.

 

“This joint venture has been very successful for both parties and we look forward to continuing our relationship with Playtech as a key software supplier. Having been advised of the valuation of Playtech’s 29 percent interest, the board has concluded that it is in the best interests of our shareholders to exercise our call option to assume full ownership of this attractive high growth [and] high performing business.

 

“We are very pleased with the indications of support from shareholders so far for the acquisition and the rights issue. In our view, the rights issue is the most appropriate way to fund the proposed acquisition. This will leave the group with the appropriate capital structure, taking into account expected trading conditions and potential future developments, and the flexibility to pursue its stated strategy.”

 

The proposed acquisition is subject to William Hill shareholder approvals and is expected to be complete before the end of April. However, if the deal fails to materialise in 2013, William Hill declared that its right to exercise the call option in 2015 will automatically terminate.

 

- See more at: http://www.igamingbusiness.com/content/william-hill-exercise-william-hill-online-call-option#sthash.ixoIhYO1.dpuf

 

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