The news broke late last week. Amaya was talking about a merger. The potential partners originally named were William Hill and GVC.
The original story from Reuters focused mainly on the strength of the talks between Amaya and William Hill, as those two companies issued a joint statement confirming talks and that an all-share merger would be “consistent with the strategic objectives” of each company. However, a source confirmed that GVC was speaking with Amaya, as had private equity firms.
William Hill and Amaya are in discussions for a £4.6bn all share merger to create one of the world’s largest gambling companies.— Capital Moments (@CapitalMoments) October 8, 2016
Not in the running is David Baazov, the former CEO of Amaya who is currently under investigation for insider trading crimes by the Quebec securities regulator. Baazov originally took a leave of absence in May due to the controversy, but he officially resigned in August to focus on his defense. Prior to his departure, however, he announced that he was planning to make an offer to buy and privatize Amaya in a $2 billion deal, though the details were still in the works. When Baazov resigned in August, his buyout desires were widely assumed to be dead, but the recent Reuters article quoted a source that said those plans were officially abandoned.
William Hill + Amaya = Hillamaya
According to information released by Amaya and William Hill thus far, the two were excited enough about the talks to release the aforementioned joint statement. In it, both admitted to reviewing options to accelerate growth, and the merger would “create a clear international leader across online sports betting, poker, and casino.”
William Hill had been looking at strategic growth options of late, which prompted a combined takeover bid from 888 Holdings and Rank Group earlier this year. The partnership submitted one bid, and after rejection, tried again, but Hill angrily rejected the offer. Hill Chairman Gareth Davis said at the time: “This conditional proposal substantially undervalues William Hill, is highly opportunistic and does not reflect the inherent value of the business.” It was unanimously rejected by the board.
It seems the main priorities for the two companies would be to use their combined assets and efforts to grow a combined sports betting brand, which has always been Hill’s primary source of revenue. Amaya is the world leader in the online poker realm, though, and moving Hill’s online poker site from the iPoker network to a much larger platform would be a plus.
GVC + Amaya = GVCA
While a Reuters source confirmed that GVC was in the running for an Amaya deal, neither company is confirming or denying it. However, there could be talks that have not yet reached the level of those undertaken with Hill. Anything is possible at this point.
GVC is primarily focused on sports betting but has thriving online bingo, casino, and poker segments as well, especially after its acquisition of bwin.party earlier this year. Amaya would benefit from joining forces with such a diverse company, and GVC could boost many of its divisions, especially online poker. Putting PartyPoker and PokerStars together would form a massive giant in the industry, one that would be nearly untouchable for any other competitor.
Amaya Has Everything to Gain
As it appears, Amaya has been unable to grow at its anticipated rate. The entry into the United States market was slow and now faces further setbacks with California on hold for another year and Pennsylvania in a complete holding pattern for another week. Expansion into other regulated markets like the Czech Republic and Netherlands has been slower than anticipated as well, with countries like Portugal at a near-standstill. Efforts to grow its online casino and sports betting arms have been measured and a bit sluggish.
The extent of any type of merger is unknown. PokerStars is likely to stay intact as its name recognition is beyond that of any other online poker brand in the world. However, it is doubtful that Amaya is married to brands like StarsDraft, so negotiations could see that effort swallowed by Sportingbet. However, all of this is speculation, as no two companies have committed to any type of deal.
So William Hill and Amaya in a merger of equals eh? Well those always end well #bwinparty— Alun (@Poker_Hack) October 8, 2016
The likelihood is that Amaya will reach an agreement with a major company. Its struggles date back to Black Friday, and despite forging ahead with some growth, nothing would benefit the company as much as a major merger.