Caesars Entertainment and William Hill agreed to a deal that would allow Caesars to absorb William Hill. The British sportsbook accepted Caesars’ bid on Wednesday over the private equity firm Apollo Management.
Surprisingly, the expectation is that Caesars Entertainment will specifically hold on to William Hill’s US assets. The major caveat to that will be that Caesars has little interest in William Hill’s larger holdings in the UK.
Per Yahoo! Finance, Caesars is not particularly interested in the London aspect of the business.
The owners of Caesars said in a joint statement Wednesday that they will “seek suitable partners or owners” for non-American assets. These assets could include, UK retail estate and other parts of the international business.
Caesars Expected to Sell Off William Hill’s International Assets
With major news that Caesars intends to sell off UK assets, William Hill will begin preparations to split the company. Since 1961, William Hill has dominated the British gambling market and has made a name for itself in the United States since 2018.
Interestingly enough, the UK side of William Hill is historically the more profitable market for the company. In large part, Caesars seems disinterested in working the overseas side with a focus on gaining legislation across the country. Many have questioned the value of Caesars’ offer to William Hill. Many analysts believe they are worth more than the $3.7 billion that they bid.
Prior to the bid being accepted, Jefferies analyst James Wheatcroft had said William Hill was worth “significantly more” than Caesars’ offer.
There is a letdown as initial reports excited shareholders with a potential bidding war between Apollo and Caesars. With that no longer in the works, there has been a considerable drop off in excitement. The “lowball” offer from Caesars resulted in William Hills stock price falling considerably after a record-setting Friday.
The expectation should be that Caesars continues to work its strong partnership with ESPN and grow the legal gambling market. The gambling conglomerate holds some of the largest casino resorts in the country and has serious market power.
It has been a busy year for Caesars Entertainment, who in July also completed a merger with Eldorado Resorts.
The merger between Eldorado and Caesars results in a database of over 65 million people who have used their products. The rewards program that Caesars Entertainment possesses will undoubtedly help expand William Hills’ already growing mobile betting market.
William Hill Buyout Signals An Arms Race Between The Major Gambling Companies
When sports betting became legal in 2018, William Hill quickly acted to become one of the front runners in the legal gambling market. This purchase of William Hill confirms that a true betting empire is in the works.
The gambling market in an unbelievable boom as DraftKings Inc. (NSDQ: DKNG) totes a $20 billion market cap and Penn National (NSDQ: PENN) is now nearing $10 billion. Caesars Entertainment (NSDQ: CZR) will climb towards the top with its purchase of William Hill.
With a reach that will go into seven legal states such as, Illinois, Indiana, Iowa, Mississippi, Nevada, New Jersey, and Pennsylvania, William Hill will be significantly more available in the United States than ever before.
This deal combines the power of land-based casinos and mobile gambling that is something few companies can compete with. Expect Caesars to continue growing as they prepare to truly take hold as one of the strongest companies in the gambling industry.
After the report of advanced talks on Monday, Tom Reeg, Caesars’ Chief Executive said, “William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to better serve our customers in the fast-growing US sports betting and online market.”
The gambling market is booming like few other thought possible and the question will now become, “how high can it go?”
It is a full-blown arms race in the land of gambling.