UK bookmaker William Hill expands into Australia
LONDON (Reuters) - William Hill (WMH.L), Britain's largest bookmaker, expanded into the large Australian gambling market when it and partner GVC Holdings (GVC.L) agreed a 485 million pound ($789 million) deal for Sportingbet on Thursday.
William Hill is paying 454 million pounds for its share of the deal - giving it Sportingbet's Australian operation and an option to acquire its Spanish business.
Smaller partner GVC will take on the remaining businesses, which are in countries where regulation is less clear cut and investment risks are higher as a consequence.
"This is bang in line with our strategy. More online revenues, more international revenues and more regulated revenues," William Hill chief executive Ralph Topping said.
"We are laying the foundations today of success for the next 30 years," said Topping, who has been with the company four decades.
The recommended cash and GVC stock deal valued Sportingbet shares at 56.1 pence, in line with a provisional deal agreed earlier this month.
William Hill and GVC had proposed a price of 61.1 pence per share but cut the offer after Sportingbet said quarterly revenue fell 35 percent.
William Hill is best known for its chain of more than 2,300 betting shops in Britain, a country where it generates more than 90 percent of its revenue.
However, it is expanding online and in overseas markets where gambling is regulated - buying three businesses in the U.S. state of Nevada earlier this year.
It has also taken a step towards acquiring full control of its fast-growing online joint venture, requesting a valuation for the 29 percent stake held by partner Playtech (PTEC.L).
In a potential complication to the Sportingbet deal, Playtech said the businesses being acquired would have to be sold on to their William Hill Online joint venture within six months. Playtech said the acquisition would increase the value of William Hill Online and hence how much its stake was worth.
"Playtech expects that the potential contribution of the Sportingbet Activities and associated synergies and cost savings will be taken into consideration as part of any valuation of William Hill Online," it said.
Setting out the reasons for the Sportingbet deal, William Hill said Australia was one of the largest licensed betting markets in the world.
Sportingbet, which operates in Australia under its own name and the Centrebet brand, had net gaming revenue there of 87.4 million pounds in the year to end-July 2012 and EBITDA of 34.8 million.
"The Aussie market is very attractive, growth rates are good, the proportion online is taking of that market is very good," said Topping.
Spain is also an important gambling market and William Hill was one of a number of companies to enter the market after new licences were issued earlier this year.
It said Sportingbet's Spanish business would allow it to achieve critical mass there more quickly.
(Editing by Dan Lalor)
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