Updated September 30, 2020 - 6:34 pm
Caesars Entertainment Inc. and William Hill PLC ended all the speculation Wednesday, officially announcing the global sports wagering giant would be acquired by Reno-based Caesars for $3.7 billion.
The deal will blend one of the nation’s largest casino companies with a premier British sportsbook operator that has outlets nationwide through its William Hill US subsidiary based in Las Vegas.
The deal is subject to antitrust and regulatory approvals, including reviews by the Nevada Gaming Control Board and the Nevada Gaming Commission. It is expected to close in the second half of 2021.
To finance the transaction, the company expects to raise $1.7 billion through an equity offering and use roughly $1.3 billion of cash on hand, including $900 million drawn under a revolving credit line on Friday, with the anticipated financing and sale of non-U.S. assets, which it believes could be worth $2 billion.
“The opportunity to combine our land-based casinos, sports betting and online gaming in the U.S. is a truly exciting prospect,” Caesars Entertainment CEO Tom Reeg said in a release issued with the announcement. “William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to serve our customers in the fast-growing U.S. sports betting and online market.”
Caesars and William Hill already have capitalized on partnerships by the two companies with ESPN, which built a studio at The Linq Promenade and broadcasts odds from Las Vegas via Caesars and William Hill.
Earlier in September, Caesars was fighting off a rival bid proposal from New York-based Apollo Global Management, a subsidiary of which once had an ownership position with Caesars.
“The William Hill board believes this is the best option for William Hill at an attractive price for shareholders,” Roger Devlin, chairman of William Hill, said in the release. “It recognizes the significant progress the William Hill Group has made over the last 18 months, as well as the risk and significant investment required to maximize the U.S. opportunity given intense competition in the U.S. and the potential for regulatory disruption in the U.K. and Europe.”
If the deal goes through, Caesars and William Hill would become a sport wagering powerhouse. The two companies currently operate as a U.S. joint venture with 20 percent and 80 percent equity ownership, respectively.
Through the existing joint venture, William Hill runs online sports betting operations through Caesars’ market access in each state and retail sports betting operations in Caesars’ properties as well as those of other casino operators around the U.S. Caesars owns and operates 54 domestic properties in 16 states. The company’s resorts operate primarily under the Caesars, Harrah’s, Horseshoe and Eldorado brand names.
Both companies believe there is room to grow the sports betting market with several state legislatures across the nation considering some form of sports betting.
Caesars also hopes to leverage several partnerships it has with professional sports teams and leagues, including a 15-year, $30 million deal with the NFL.
New York-based Jefferies gaming industry analysts David Katz said Caesars’ shareholders are getting a good deal in the transaction.
“The future growth largely accretes to Caesars, although we do not expect meaningful resistance from William Hill shareholders as of now,” Katz said in his report. “The prospects for selling the (United Kingdom) assets should largely defray the cost of the acquisition.”
Caesars shares closed up $1.57, 2.9 percent, in trading that was three times the normal daily average, hitting $56.06 a share. After hours, it was still climbing, up another 14 cents or 0.25 percent to end at $56.20 a share.