William Hill Urged to Sell Company
The principal investor in the William Hill brand, Parvus Asset Management, a London-based hedge fund currently in control of 14.3 percent of the UK gambling brand, has had merger on its lips this week.
According to British newspaper, The Sunday Times, Parvus reps were quoted as urging for a merger between William Hill and another reputable gambling house. Names passed across the table have included 888, GVC holdings, and The Rank Group. William Hill attempted to purchase both The Rank Group and 888 in the summer of 2016.
William Hill has been in the industry for nearly a century with its founding going way back to 1934. Today, the company employs some 16,000 staff worldwide and operates 2,370 retail betting locations throughout the United Kingdom. All this compliments its robust online gambling options, which includes casino, sportsbook, bingo, and poker.
The move is likely in response to the several recent realignments of gaming companies over the last year. One of the most notable confirmed mergers being between Ladbrokes and Coral gaming, two of the largest players in the UK gambling market.
Parvus Makes Waves
Last year the hedge fund lambasted William Hill for nuzzling up to Amaya, a Canadian gaming company whose most notable brand is PokerStars.
Brand representatives from Parvus went off on William Hill in a public letter, stating, “We strongly encourage that the board stops wasting valuable time and shareholder resources pursing this value-destroying deal. The board and management must focus on maximizing value for William Hill owners, rather than Amaya shareholders.”
At this point Parvus is pushing harder for William Hill to make good on investor commitments after a recently disappointing revenue report. The company’s share have dipped considerably on the London Stock Exchange over the last quarter.
Prior to the proposed merger between William Hill and Amaya, stocks for the brand were being traded at 313 GBX ($3.93). However, on Tuesday, stocks closed at $3.39, a fall of 14% in just three short months. While Parvus continues pushing the idea of a sale on William Hill, they remain staunchly opposed to any partnership with Canadian gaming company Amaya.
Regulation on the Rise
While stock prices are inching stockholders further in favor of a sale, impending regulations on the horizon are another issue making investors anxious to make the move. Financial services company UBS warned William Hill earlier this year that more stringent gambling policies are on the way. The company recently stamped Hill with a “sell”, providing British Parliament members’ desire to reduce the betting maximum on fixed odds from £100 to £10 ($125 to $12.50) as the chief reason for their decision. Estimates from UBS see William Hill’s bottom line taking substantial losses of up to 74% in the coming year.
Interim CEO for William Hill Philip Bowcock refused to be shaken by the designation, stating in a recent press release, “With key underlying trends continuing to be positive, the recent run of sporting results have not changed our confidence in a better performance in 2017.”
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