Saved: William Hill betting shop brand to stay after £2.2 billion deal with 888
William Hill's betting shops look set to continue to be part of the new group formed by the £2.2 billion acquisition of one of the gambling industry's most famous brands by online company 888.
888 was on Thursday confirmed as the successful bidder for William Hill International following a tussle with private equity group Apollo Global Management.
Casino giant Caesars Entertainment completed a £2.9bn takeover of William Hill in April, but they made it clear they were only interested in the firm's US arm and would sell off their business in Europe, including Hills' retail estate of more than 1,400 betting shops.
There had been speculation that 888 would subsequently sell off the shops, with Betfred and BoyleSports seen as likely bidders.
However, when the news of the deal was announced on Thursday morning, chief executive Itai Pazner said 888 was "excited about the opportunities the retail business provides and see significant brand benefits to the enlarged group from its large estate".
He later told journalists: "Adding retail gives us a great new channel to engage customers and build our own brand, while continuing the heritage of the William Hill brand."
Pazner said 888 had seen interest from outside for the shops but explained they were "an integral part of the William Hill brand".
He added: "It has been scaled down over the last couple of years through the changes in FOBT regulations and then Covid. Today they are managing a well-run retail estate which is present in prime locations. We are planning to keep the retail stores and the great staff that William Hill have developed in those retail outlets.
"The guys at William Hill have been doing a great job in running it. We will let them continue to run the business and implement their plan. They are also going through quite a significant technological upgrade over the next year or so, so we will follow their lead and let them continue executing well, as they have done up to now."
The deal will transform 888 into one of the major players in the gambling industry. The combined group would have had revenues of $2.5bn (approx £1.8bn) and adjusted underlying earnings of $464 million (£335m) in 2020, taking its UK market share past bet365 into third behind Flutter and Entain.
Previous attempts in 2015 and 2016 to combine the two businesses had failed and Pazner described Thursday's news as "a historic day for 888".
"This deal brings together an iconic sports betting brand with our renowned online gaming brand," he said.
"888 and William Hill is a combination people have tried to create on more than one occasion in the past and the reason for that is because the businesses are so complementary."
888 said it had taken on around £2.1bn of debt to fund the acquisition and expected to raise approximately £500m by issuing new equity via a capital raise. The deal is expected to be completed in the first half of 2022.
William Hill chief executive Ulrik Bengtsson said the deal provided a "powerful alignment of brands and technology".
He added: "This transaction is a testament to the progress William Hill has made over the last two years, our unrelenting focus on customer, team and execution and, most importantly, the dedication and commitment of William Hill colleagues."
Goodbody gaming and leisure analyst David Brohan said the news would be "positively received" by the markets once the numbers were digested, and that the price paid "looks attractive".
888's share price was down 13.2p at 389p at close of trading on Thursday.
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