There was never any doubt that Caesars Entertainment would eventually take over William Hill and the $3.7 billion (£2.9 billion) acquisition of London-listed land-based, online casino and sports betting entity is now in its final stages!
On 23 November reports confirmed that 47.3% of the overall voting power was in the hands of shareholders with an overwhelming percentage of those votes shifting the odds of the US company’s take over convincingly in Caesars Entertainment’s direction. It did not take much to push those odds further with the remaining 52.7% of shareholders unanimously in agreement thus convincingly swinging the company into Caesars Entertainment territory.
At the time Caesars announced that the transition will not finalise until Q1 of 2021, and as it is March, the final stages are close to being right on cue with Q2 now the confirmed date. Part of the hold up was the need to wait for regulatory authorities in the UK to bring Caesars Entertainment under legal business and UK gambling frameworks.
According to a source at the Las Vegas-headquartered behemoth the elementary regulatory requirements should be finalised by the end of March. This then gives Caesars a few weeks to adjust which is why Q2 is now the new confirmation date. This adjustment is pending breaking down the final barrier which is a scheduled appearance at the Business and Property Courts on the last day of the month.
Once the expected approval goes through, from 1 April, Caesars Entertainment will take control!
Shares in Both William Hill and Caesars Marginally Show Positive Improvements
As with most takeover, share prices fluctuate slightly. With Nasdaq-listed Caesars Entertainment now 99.9% over the line its shares rose 3.3% up on the previous day’s $93.69 closing price. William Hill, listed on the London Stock Exchange were not so flamboyant with a 0.2% rise bringing its market capitalisation up to just shy of $4 billion. On top of this, William Hill brings with it one of the best and most successful PLC iGaming firm, Evolution Gaming.
A Rocky Ride for William Hill Over 2021
Both companies have had a rocky ride over the past few months.
William Hill’s reported 1,414 land-based betting shops retail stores took a hit due to closures and are still not due to reopen until at least May 2021. Its online sportsbook also showed poor performance while sports events closed for at least 4 months. The effect is said to have cost the firm $1.52 billion – a 51% fall off from the year prior.
The firm did however hold on thanks to its online casino and poker vertices which inevitably saw a rise in revenue as lockdown resulted in more people transitioning to iGaming such as blackjack, slots, and virtual sports such as virtual racing, football, scratch cards, and eSports. This side of the business stated a 9% year-on-year increase in annual revenues which amounted to a respectable $1.11 billion.
Caesars Entertainment Reports Losses but Share Increases Inevitable
For most, a downturn in land-based gambling businesses could be interpreted as the worst time to invest. Yet, Caesars Entertainment sees that there is a silver lining to every dark cloud. William Hill’s huge betting presence and iGaming profitability perfectly matched Caesars Entertainment contingency plans in the unlikely event another pandemic hits.
Online presence: Adding William Hill’s online presence and already established digital presence in both the UK market and USA’s New Jersey legal iGaming scene gives Caesars a larger market share in the sports betting and casino sectors. Combine William Hill’s already profitable online markets and Caesars online sports and casino presence in New Jersey (a location with a deal also in place with an Evolution studio), and Pennsylvania, then William Hill in Michigan where Caesars is not currently in operation, and the deal appears to get sweeter by the minute.
Land-Based Presence: Here’s the kickback and many may not see it. When land-based casinos and betting retail stores reopen in May, an influx of punters should start to flock into gambling entertainment venues. The alternative is to stay at home which let’s face it, most of us have had enough of home. Tourism will also rise to help Caesars own land-based businesses. And as the cash flows in, stocks will rise.
It’s a rather simplistic version of what it is to come, but for Caesars Entertainment the make-or-break risk is certainly worth the risk when you consider the potential of a mad rush from those seeking to indulge, or even overindulge in entertainment to miss out on lost time and the chance to socialise!