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Sportingbet Rejects Takeover Bid

Sportingbet has rejected William Hill and GVC’s £350 million takeover offer, claiming that it “significantly undervalues the business and its future prospects.”

The joint offer was for 52.5 pence a share, representing a 20% premium on Sportingbet’s closing share price the day before the announcement.

According to data compiled by Bloomberg, in the 80 deals for European gambling operators since 2004, the acquired companies sold for a 19% premium.

Sportingbet is seeking another suitor to spark a bidding war, according to reports. Paddy Power could be a potential counter-bidder, though another offer is unlikely. Operators don’t want to touch Sportingbet’s politically sensitive, unregulated assets.

Equity analysts tracking the company expect William Hill and GVC to up their offer to 60 pence a share, valuing Sportingbet at £400 million.

“We believe Sportingbet is worth over 60 pence per share, excluding any bid speculation, and expect Wednesday’s full year results to show the business continues to make strong underlying progress,” Panmure Gordon wrote to clients.

A handful of analysts, including Ivor jones at Numis, think that Sportingbet shareholders could hold out for as much as 90 pence a share.

William Hill would acquire Sportingbet’s regulated assets in Australia and Spain, while GVC would pick up the company’s unregulated markets.

Sportingbet’s lucrative Australian business accounts for half the group’s revenues and the vast majority of profits. Recently regulated Spain makes up 14% of revenues.


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