- »Potential Biz Deals in 2021 Include Caesars and William Hill
Potential Biz Deals in 2021 Include Caesars and William Hill
As 2021 gets underway, a number of the world’s largest gaming and gambling-related companies are considering mergers and acquisitions.
One that seems to be on track to pass all regulatory hurdles will end with Caesars Entertainment acquiring William Hill in the first quarter of 2021. Las Vegas Sands is considering a takeover of 888 Holdings, though there is no official word on talks yet.
Another one was gaining momentum in the past few weeks but fell apart, as Entain (formerly GVC Holdings) turned down an offer to buy from MGM Resorts.
Caesars and William Hill
This seems exhausting for Caesars Entertainment. Eldorado Resorts just acquired Caesars in July 2020 for $18 billion. Eldorado combined its 26 properties with 53 belonging to Caesars and rolled them all up under the Caesars Entertainment name.
Some of the executives never left the boardroom, as Caesars announced in September 2020 that it would be acquiring William Hill for $3.7 billion.
The Caesars-Eldorado deal was primarily an effort to accrue a larger market share in the United States. The Caesars-William Hill deal appears to have the same goal.
What about the massive presence of William Hill in the UK market? A part of the deal is that Caesars will sell all of the non-US operations, including more than 1,400 betting shops in the UK. Apollo Global Management, a private equity firm in the US, may buy the UK assets, though there is also a chance they could go through an auction process. 888 Holdings expressed interest.
If the Apollo name sounds familiar, it is because it just recently signed a deal to acquire Great Canadian Gaming Corporation for $3.3 billion. There was some haggling over share prices, but the two companies agreed to the deal in late December 2020.
Latest Progress for Caesars
The Caesars bid for William Hill had numerous regulatory mountains to climb, both in the UK and the United States.
In late December, Caesars cleared one major hurdle in the US as the US government terminated the waiting period for the deal to move past the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The series of points connected to antitrust laws ensures that the companies looking to merge or engage in an acquisition provide a detailed filing to the US Federal Trade Commission and Department of Justice.
The next steps include multiple regulatory approvals in American states, as well as a 75% approval from the William Hill shareholders. It is unclear if this will pass, considering the uncertain future for the UK assets only adds to troubles due to the coronavirus pandemic.
Las Vegas Sands and 888 Holdings
On January 12, Las Vegas Sands CEO and Chairman Sheldon Adelson died at the age of 87 from cancer. His intentions for his company to enter into any mergers or acquisitions are not public, but there was something in the works before his death.
Bloomberg reported on January 8 that Las Vegas Sands had discussions with “potential partners” to gain a footing in the world of sports betting, especially in the US market.
Analysts have been speculating on potential partners for Sands, and 888 Holdings is the one getting the most attention. Not only does 888 offer online casino and poker in the US market, 888sport is one of the fastest rising companies in the market.
Broker Peel Hunt is one suggesting that a Sands-888 deal could put the entity in a position to compete with Caesars of the aforementioned acquisition deal with William Hill. No media outlet has confirmed discussions between LV Sands and 888, though, so it is speculation at this time.
MGM Resorts and Entain
Entain is a UK-based gambling company that only recently changed its name from GVC Holdings. GVC is the parent company of PartyPoker and numerous other gambling brands, including Ladbrokes and Coral.
MGM Resorts’ bid for Entain didn’t come out of nowhere, as their two paths have already intertwined in the US market.
However, MGM made its move in late 2020 to absorb all of Entain for $11 billion. Entain rejected that offer, though, stating that it significantly undervalued the company and its potential. Part of that potential is Entain’s value as a part of the US sports betting market, which experts expect to quintuple by 2024. That would put the market, as a whole, at $8.4 billion.
When Entain rebuffed the MGM offer, Entain CEO Shay Segev suddenly announced his departure from the company after only seven months in that position. He claimed that the deal talks did not affect his decision.
No Deal for Now
On January 19, MGM Resorts announced that it would not make a bigger bid for Entain. The agreement between BetMGM and Entain will remain in place with regard to the US sports betting market.
The press release from MGM noted that it carefully considered a new offer and the “limited recent engagement between the respective companies regarding MGM’s rejected all-stock proposal.” MGM’s official response was that “it does not intend to submit a revised proposal and it will not make a firm offer for Entain plc.”
This does provide a possible opening for Las Vegas Sands to entertain Entain instead of 888, but this is only more speculation. It seems, though, that this is the season to merge.
More states in America consider legalizing sports betting, creating an exploding market, as previously mentioned. In addition, Canada is closer than ever to legalizing single-event sports betting. That would open an entirely new market north of the US border, another opportunity for mega-corporations to grow in North America.