After more than three months of negotiations and four deadline extensions, William Hill and GVC have reached an agreement to purchase Sportingbet for £485 million, or 56.1p per share. The British bookmaker will acquire Sportingbet’s Australian business, with a call option on Spanish operations, while GVC will pick up the company’s unregulated assets.
"This acquisition not only highlights William Hill's commitment to grow further internationally into regulated, high growth markets such as Australia, but also supports our strategic aim to diversify revenue sources into new territories and through greater multi-channel usage," said William Hill chief executive Ralph Topping.
The bookmaker estimates that the addition of Sportingbet’s Australian and Spanish businesses could boost online operations to more than 40% of net profits. Sportingbet, which offers sports betting under its own brand and Centrebet, generated revenues of £87 million and earnings before interest, tax, depreciation and amortization (EBITDA) of £35 million in the last fiscal year.
Sportingbet rejected an offer of £350 million in early October, but agreed "in principle" on a 65p per share deal in December. That figure, however, was recently revised to 56.1p per share after Sportingbet announced that revenues fell 35% year-over-year.
The current joint offer is made up of 86% in cash from William Hill and 14% in GVC shares, and is expected to be completed by the end of the first quarter of 2013.
Playtech, which has a 29% stake in William Hill Online, released a statement suggesting that the Sportingbet purchase should be included in the valuation process of it online joint venture with William Hill.
"Playtech has the right, in its absolute discretion, to determine whether William Hill Online proceeds with the acquisition of the Sportingbet activities. Playtech believes that it is likely that the acquisition of the Sportingbet Activities would add considerable value to William Hill Online," it read.
Playtech is positioning itself to maximize the price William Hill pays for its stake in William Hill Online. The two have endured a fractious relationship. In February 2011, William Hill took out an injunction against Playtech to prevent the software provider from entering into merger talks with Ladbrokes. Later that autumn, William Hill’s Tel Aviv office staged a mass walkout in protest over plans to move headquarters to Gibraltar.