Update: Caesars Entertainment confirmed on September 28 it is in “advanced discussions” over a possible ￡2.9bn ($3.7bn) acquisition of William Hill with a cash offer of 272p per share.

Formal offer required within a month

The gaming industry could be on the verge of a major shakeup, as both Caesars Entertainment Inc. and Apollo Management Inc. have offered to buy sports betting giant William Hill. William Hill’s board of directors confirmed the approach by both companies on Friday.

The proposals occurred about a month ago. On August 27, Apollo made a written, cash offer to acquire William Hill. Caesars followed with more than one proposal, and Apollo itself made another offer shortly thereafter.

According to United Kingdom law – William Hill is headquartered in London – both suitors are required to make formal offers by October 23. No details of the August proposals, financial or otherwise, have been made public.

there can be no certainty that any offer for William Hill will be made”

“Discussions between William Hill and the respective parties are ongoing,” William Hill’s board said. “There can be no certainty that any offer for William Hill will be made, nor as to the terms on which any offer might be made.”

Possible deal makes sense to analysts

Eilers & Krejcik Gaming analyst Chris Grove told the Las Vegas Review-Journal that it is not surprising that Caesars and William Hill are looking at joining forces, considering the recent valuations of players such as DraftKings and Penn National Gaming.

“And they won’t be the last,” he added. “This consolidation will be a defining theme of the market in the months and years ahead.”

Put simply, it is a great time for William Hill to wring every cent out of the market, as well as for Caesars to absorb a proven online entity. “Sports betting continues to be the bright and shiny object on the shelf in the gaming space as expansion continues across the United States,” Brendan Bussmann of Global Market Advisors told the Review-Journal.

William Hill confirmed earlier this month that it was discussing merging its online sports betting and online gambling businesses with Caesars, though the current offers would involve the entire company.

Caesars, William Hill have history

Caesars and William Hill are already part of the same corporate family, in a sense. In January 2019, William Hill completed a deal with Eldorado Resorts to become the casino company’s sports betting operator for 25 years. As part of the agreement, Eldorado received a 20% equity stake in William Hill US plus over 13 million shares of William Hill Plc.

Then, in July of this year, Eldorado and Caesars completed a $17.3bn merger to create a new Caesars Entertainment that operates dozens of properties in 16 states. Caesars now owns the portion of William Hill US and William Hill Plc that had been acquired by Eldorado.

William Hill skyrocketed on the London Stock Exchange

Caesars Entertainment shares rose nearly 8% on Friday, closing at $57.07. William Hill skyrocketed on the London Stock Exchange, jumping ￡0.946 ($1.21) to ￡3.122 ($3.98) – a 43.47% increase.

William Hill has been aggressive in its expansion across the U.S., most recently opening its first brick-and-mortar sportsbook in Michigan.