Hedge funds hit out at William Hill after the information provided before, during, and after the Caesars Entertainment Inc takeover has been dubbed as highly irregular and confusing!
Accusations from hedge funds are being heavily weighed against the William Hill board. The indictment was based on the failure of William Hill’s board to disclose or provide sufficient information that relates to the takeover of the bookmaker. As this was a public takeover, more information should have been made available and if proof emerges in court, a full-blown civil lawsuit could follow costing the firm millions. Even if William Hill were to settle before it gets to civil court, the floodgates will surely open for similar legal disputes!
The management and executives of HBK Capital, including the Management of GVM assets, wrote to the board of bookmakers ahead of the court hearing for the deal on Wednesday’s approval. There have been arguments that there was insufficient information for the shareholders to support William Hill’s £2.9bn takeovers by Caesars when it was voted on in November.
According to GWM, it has made its intentions known to challenge the takeover on Monday. This was made known by the financial times, according to a letter it saw that the board had refused to show information of “potential material” about the ability of Caesar for the termination of its partnership with William Hill in the United States, probably if there is a new acquirer tries to purchase the UK bookmaker. The hedge fund, on the other hand, had made it known if shareholders have been informed, there may have been a different vote and that it was also prevention for a likely auction for the company that may have had an outcome of being sold at a higher price.
Misinformation and Slow Stock Price Momentum May Have Cost Investors!
Since the strike of the deal which saw William Hill shares move to 272p per-share value, but on the whole gambling stocks have increased anyway, making the increased shares less attractive at this time. iGaming stocks have improved largely thanks to the U.S. market’s rapid growth as more states, especially in William Hill’s main sector of sports betting. Plus, there was an uptick in online gambling while the lockdown was in force. One country with the most valuable and fastest-growing markets worldwide right now certainly is the United States of America. This came after the ruling of the Supreme Court, which enables the state to include sports betting in a list of its legalized activities in the year 2018.
HBK, with an exposure of 10% to William Hill last week, forwarded a public letter to the board with arguments that stated that it had “guided the market to be sure that there will be no possibility of a rival bid for William Hill.”
With just a percentage, GWM is exposed to William Hill’s share via its trade of derivates. However, it said he is interested in contesting the deal on the fact that it was “against the spirit of the code of UK takeover.”