Takeover target Sportingbet has rejected an opening bid of £350m from William Hill and GVC Holdings, its board saying the offer “significantly undervalues the business and its future prospects”.
Sportingbet was responding to an “indicative offer” from its fellow London-listed operators of 52.5 pence per share, consisting of 45 pence in cash from William Hill and 7.5 pence in shares from GVC, valuing the company at just over £350m.
Hill’s and GVC have until 16 October to make a firm offer for Sportingbet, so may yet up their bid for the online betting and gaming operator ahead of this deadline. The prospective bidders may also have to limit the GVC paper element to bring the Sportingbet board to the negotiating table.
The approach for Sportingbet, confirmed on 19 September after its share price rose 17% in an afternoon upon speculation an offer was imminent, 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’s prized Australian-licensed business, bolstered last year with the acquisition of Centrebet for approximately £120m, contributed 43% of revenue and 90% of profit in the last quarter to the end of July.
Hill’s has not yet disclosed what other locally licensed markets it would look to acquire as part of the proposed transaction. Sportingbet is joint market leader for online sports betting under its Miapuesta.es brand in Spain, and has licences for Sportingbet and Centrebet in Denmark. The company has also been paying gaming taxes ahead of licensing in Greece, where it is one of the two market leaders for online sports betting.
William Hill’s approach for Sportingbet’s regulated business follows less than 12 months after bitter rival Ladbrokes’ £460m bid for the whole group foundered upon regulatory concerns over the Superbahis business in Turkey, subsequently carved off and sold to GVC for a minimum consideration of £125m.
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 both of these markets, particularly 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. Around 5% of Sportingbet’s revenues are generated from the German market, where it is the sixth largest operator.
Other online operators are now also understood to be weighing possible offers for Sportingbet in the wake of William Hill and GVC’s approach.
Article written by Stephen Carter