William Hill Assets to Be Divested by Caesars Entertainment

The completion of the deal between William Hill and Caesars Entertainment occurred in mid-April. A deal that put William Hill entirely under the ownership of Caesars for $3.69 billion. Caesars has long planned to auction off William Hill assets around the world and two potential buyers have already been identified. The European assets are likely to be bought by 888 Holdings and Apollo Global Management. The latter lost out to Caesars when bidding for William Hill.

Divesting Assets

Reports state that Caesars Entertainment will be putting William Hill assets up for sale in early May. The sale will mainly include retail locations around the world. However, the sale will also include the UK and European online casinos and online sports wagering businesses. The plan to divest William Hill’s European assets was already made evident in September 2020. So, the auctioning off of the assets comes as no surprise to industry stakeholders and sports fans alike.

Furthermore, industry insiders have reported that Apollo already has the upper hand when it comes to the purchase of the assets given that the company has far more financial weight behind it than 888 Holdings. Additionally, there are speculations that 888 Holdings have already been targeted as an acquisition by Las Vegas Sands. Verified reports have yet to surface regarding the takeover.

Acquisitions at Apollo and Other Bidders

In the past few months, Apollo Global Management has been in full swing on the acquisitions front. The company recently acquired the Great Canadian Gaming Corporation and has partnered with VICI Properties to complete a purchase of the Venetian and Sands Expo And Convention Center in Las Vegas. The deal is said to be worth 6.25 billion U.S. dollars. According to reports, Apollo already has a partner for William Hill’s European assets. It will likely be paired with the Italian gaming operator Gamenet as a way to cut costs. In December 2020, the private equity company paid 1.15 billion U.S. dollars to software development company International Game Technology (IGT) to acquire Gamenet.

Even though Apollo seems to be best suited to acquire and take on the William Hills assets given its leverage and financial backing in the gaming industry, 888 Holdings also has a strong case. The company is known for its focus on online poker and iGaming and has previously stated that adding a sports betting component to its portfolio will greatly strengthen its services and products as a whole. Aside from the most obvious companies interested in the auction of Caesars’ assets, other companies such as Betfred, Betsson and Kindred have also been seen to have a keen interest in the auction.

Covering Their Losses

Caesars Entertainment has debts to cover due to the purchase of William Hill, which may be the main reason behind the divestment. To complete the William Hill takeover, Caesars received bridge financing to the tune of 2.03 billion U.S. dollars. According to industry analysts, the sale of the non-U.S. assets could cover the debt completely with some extra to boot. This means that Caesars will likely be pushing hard for the completion of the sale to balance its books. Analysts have also reported that the takeover of William Hill along with the financial burden that came with it, was to gain leverage on the U.S. sports betting market by eliminating a competitor by acquiring the company.

Officials at Caesars have previously aired their opinion that the company is focused on the U.S. gaming market. It wants to ensure that there are no distractions in the form of operations and costs required to run establishments internationally. On that premise, the company will likely look into divesting its nine casinos it has currently operating in the UK along with the William Hill assets. Apollo Global Management will have the financial backing to take over the casinos in the UK, but there is nothing to indicate that the private equity firm has any interest in those properties as yet. To keep its focus on the U.S., Caesars has previously attempted to offload the UK casinos to an unnamed Canadian gaming company. Though there aren’t many details available, it has been reported that the deal was unsuccessful, leaving Caesars to find another way to divest these properties.