Hill’s and GVC propose Sportingbet carve-up

William Hill and GVC Holdings are considering a joint bid for fellow London-listed operator Sportingbet.

William Hill was forced to confirm the companies were “in the preliminary stages of considering a joint offer” after Sportingbet’s share price began to rise sharply this afternoon upon speculation an offer was imminent.

The proposed offer, “substantially in cash with an element of GVC paper”, would see William Hill acquire the Australian division and other parts of the Sportingbet business operating in regulated markets, while GVC would add the remaining dot.com businesses to the Turkish-language Superbahis business it bought from Sportingbet last year.

Sportingbet shares were up nearly 17% in afternoon trading, valuing the equity of the betting and gaming group at just over £340m.

Sportingbet’s sought-after Australian-licensed business contributed 43% of revenue and 90% of profit in the last quarter to the end of July. It was bolstered last year with the acquisition of Centrebet for approximately £120m. The other major market in which Sportingbet currently operates a regulated business under local license is Spain, where its Miapuesta brand commanded around 20% market share for online sports betting and was the joint market leader – alongside bwin – ahead of the market opening in June. Spain represented 9.4% of Sportingbet’s revenues in the last half year to 31 January 2012.

The group has since last summer also been paying gaming taxes in Greece – the other market where it holds a No 1 position for online sports betting – since the country passed a law to regulate online gambling last August. While licensing has been delayed by the economic crisis, it remains to be seen how this potentially valuable, soon-to-regulate market would be treated under the terms of the proposed transaction. Sportingbet also operates a Danish-licensed website, but this represents a tiny part of the overall business.

Hill’s said that the businesses acquired from Sportingbet “would be a subsidiary of William Hill and not William Hill Online”, making it clear that that it would be wholly owned by the company. Software provider Playtech owns 29% of William Hill Online, and is understood to have power of veto over any acquisitions, which it exercised over the proposed acquisition of mobile operator Probability last year.

William Hill’s approach for Sportingbet’s locally licensed business follows less than 12 months after bitter rival Ladbrokes’ £460m bid for the whole group foundered upon regulatory concerns over the Superbahis business, subsequently sold to GVC.

As well as Superbahis in Turkey, GVC operates the German-facing Casino Club brand and South America-facing Betboo brands. Acquiring Sportingbet’s dot.com business would strengthen GVC’s presence in Latin America, where Sportingbet’s Miapuesta is one of the leading online betting brands and the leading advertiser alongside PokerStars, undertaking swathes of advertising in football stadiums across Brazil.

Casino Choice journalist

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