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UPDATE 3-Caesars to buy William Hill for $3.7 bln in sports-betting drive

Wed, 30th Sep 2020 07:48

* Caesars seeks full control of U.S. joint venture

* Caesars to sell William Hill's non-U.S. operations

* Former rival bidder Apollo could buy UK assets - sources

* 888 signals interest in William Hill's European business
(Adds 888 CEO quote, analyst comment)

By Tanishaa Nadkar

Sept 30 (Reuters) - U.S. casino operator Caesars
Entertainment agreed on Wednesday to buy British-based
gambling group William Hill for 2.9 billion pounds ($3.7
billion) to expand in the fast-growing U.S. sports-betting
market.

The U.S. group, owner of Las Vegas's Caesars Palace, intends
to sell William Hill's non-U.S. operations, including more than
1,400 UK betting shops, and said it would integrate the U.S.
business into Caesars with few, if any, job losses.

It could sell the UK assets to private equity group Apollo
, sources told Reuters this week, and if that failed,
launch an auction process.

Online gaming firm 888 said it would be interested.

"We're looking at different activities and bolt-on
acquisitions. This (William Hill's European business) can
definitely fall under that category," CEO Itai Pazner told
Reuters.

Stifel analyst Bridie Barrett, meanwhile, said she viewed a
tie-up between Caesars and 888 as increasingly likely in the
medium term, but added the U.S. firm may not have the appetite
for a deal for now.

Shares in William Hill, which already offers sports betting
in Caesars casinos in the United States, hit a two-year high of
312 pence on Friday after the British company said it had
received separate takeover offers from Caesars and Apollo.

With the board backing the deal with Caesars, market pricing
now indicates investors expect the 272 pence per share takeover
by the U.S. company to go through. William Hill shares were last
down 0.15% at 273.85 pence.

"This is the best option," William Hill Chairman Roger
Devlin said.

The deal, which Caesars will partly fund via a $1.7 billion
issue of new stock, is a move to take control of - and expand -
the companies' U.S. sports-betting joint venture, currently
80%-owned by William Hill.

Long the preserve of informal bookmakers, sports betting in
the United States is growing rapidly after a landmark ruling in
2018 and gambling companies are reaching out for European
expertise to back expansion.

In Britain, William Hill has closed more than 700 betting
shops after new regulations limited the maximum stake on
lucrative gaming machines. Its UK rivals include GVC,
which owns the Ladbrokes brand, as well as Flutter Entertainment
.

Jefferies analysts said the prospect of a bid battle with
Apollo had faded due to the threat of Caesars terminating the
joint venture if its deal failed. For the bid to go through, it
needs 75% support from William Hill shareholders.

($1 = 0.7794 pounds)
(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Vinay
Dwivedi and Mark Potter)

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