William Hill in advanced talks with Caesars over £2.9bn takeover

William Hill are said to be in "advanced discussions" with US casino giant Caesars Entertainment over a proposed £2.9 billion takeover.

The announcement comes after the bookmaking firm confirmed on Friday it had been approached by Caesars as well as private equity firm Apollo Global Management.

Having put forward a cash offer of 272p per share, Caesars said the William Hill board was "minded to recommend" the proposal to shareholders.

The bookmaker's share price rose sharply on Friday following confirmation they are at the centre of a potential bidding war, increasing by more than 43 per cent on the day to close at 312.20p on Friday evening. However, the share price had dropped to 273.40p in early trading on Monday and closed at 275.90p.

William Hill share price surges after company receives two buyout proposals

There has been speculation recently that Hills had been in discussions to merge their US sports betting and online gaming operations with Caesars, which already owns a 20 per cent stake in William Hill US.

William Hill have been increasingly focusing on the burgeoning American market as more states legalise sports betting following the lifting of restrictions in 2018.

A takeover by Caesars would mark a significant US expansion for William Hill.

Caesars chief executive Tom Reeg said: "The opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect.

"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."

However, Caesars warned that a successful bid by Apollo would result in them halting their joint venture with William Hill, which would limit market access in a number of areas.

Bill Barber: strong US arm key reason why Hills have attracted two big suitors

Goodbody Stockbrokers gaming and leisure analyst Gavin Kelleher believes that gives Caesars an advantage over any competitor.

He said: "Given the move in William Hill's share price on Friday, some people will see the 272p as a somewhat disappointing outcome. However, the statement in this morning's release that Caesars has the right to terminate the William Hill US JV, means it is hard for Apollo or any other party to acquire William Hill and Caesars holds significant power in negotiations.

"Caesars will point to the significant premium this represents to William Hill's share price prior to Friday. Others will outline how the US market opportunity is significant [Caesars itself references a Total Addressable Market of $30-35bn] and how even if one builds in William Hill obtaining a small share of this you can reach a fair value north of 300p. The key thing now is whether William Hill shareholders push for a higher price."

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