William Hill preparing for Australian sale
William Hill have appointed Citigroup as advisers on a sale of their Australian business, although reports from Australia suggesting a deal could be done by next month's results announcement are understood to be very ambitious.
The bookmaker revealed on Monday they were carrying out a strategic review of their Australian arm, saying that a ban on credit betting and the likely introduction of a point of consumption tax in a number of states there meant "it is clear that profitability will increasingly come under pressure."
Hills' Australian business could fetch from Aus$200 million to Aus$300m (approximately £115.5m-£173m/€130m-€195m), although all options are understood to be on the table, including splitting the business off into a joint-venture with another partner or a merger.
Last year the company said they had engaged in "very preliminary" talks with local rival Crownbet about a deal, while Paddy Power Betfair's Australian arm Sportsbet would be among the frontrunners to buy the business to help meet the challenge of the newly-merged Tabcorp and Tatts Group.
Reacting to the report in the Australian Financial Review, analysts at Goodbody said: "While losing international diversification is a negative, the [William Hill] Australian business is likely to struggle to remain profitable as a standalone business given likely increased taxation and the credit betting ban. Without scale, divesting of the business makes sense."
Hills did not wish to comment.
The news of the review came alongside a trading update that revealed Hills' overall profits for 2017 would be ahead of expectations, thanks to a run of favourable sports results, with full-year adjusted operating profit for 2017 expected to be around £290m, up 11 per cent on the previous year.
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