William Hill and GVC are considering a joint offer for online gambling rival Sportingbet.
William Hill would acquire Sportingbet’s regulated assets in Australia and Spain, while Isle of Man-headquartered GVC would pick up the company’s unregulated markets. The bid would be “substantially in cash with an element of GVC paper”, according to a joint statement from William Hill and GVC.
Sportingbet said it was in “preliminary” discussions with the companies but no formal approach had been made. Under British takeover rules, William Hill and GVC have until October 16 to announce a formal bid.
William Hill is eager to tap into the lucrative Australian market. Sportingbet’s Australian business accounts for half the group’s revenues and the majority of profits. Spain, a newly regulated online market, makes up 14% of revenues.
A collaborative purchase would allow William Hill, Britain’s largest bookmaker, to avoid some of the regulatory issues that forced Ladbrokes to call off talks with Sportingbet in October 2011.
Shortly following Ladbrokes’ decision to abandon negotiations, Sportingbet offloaded its unregulated and much-criticized Turkish business to GVC-backed East Pioneer Corporation.
The market is eagerly awaiting William Hill and GVC’s expected bid of £350 million. According to data compiled by Bloomberg, in the 79 deals for European gambling concerns since 2004, the acquired companies sold for a premium of 19% .
Sportingbet shares soared 17% on the news, giving it a market value of £340 million. William Hill’s stock dipped 2%, while GVC jumped 13% in London trading.