William Hill 'In Takeover Talks'

[clevfan]

Sun 17 Apr 2005

1:07pm (UK)
William Hill 'In Takeover Talks'

By Graeme Evans, PA City Editor


William Hill was today reported to be in talks on a £500 million-plus deal that would see it leapfrog Ladbrokes to become Britain’s biggest bookmaker.

The company, which has 1,600 sites, is said to have approached gaming group Stanley Leisure over the acquisition of its estate of 600 betting shops.

While a deal would take William Hill beyond the 2,000 outlets operated by Ladbrokes, it is still likely to face competition from other parties, possibly Britain’s third-biggest bookie Coral and pooled betting business the Tote.

The proposed deal could also spark regulatory concerns as William Hill would be left with around a quarter of the total UK estate of 8,500 sites.

Stanley is not thought to have been courting buyers for the business, although the Sunday Times said the company would be prepared to consider an offer if one was made. The newspaper put a price tag of £500 million on the business, but the Observer said that Stanley could demand more than £700 million.

Representatives of William Hill and Stanley Leisure were unavailable for comment today.

A sale of the betting division would leave Stanley with its casino arm, which owns some of London’s leading gaming halls and 37 sites in cities including Bristol, Liverpool and Birmingham.

The deal will fuel speculation that Liverpool-based Stanley Leisure could be moving towards a merger with casino firm London Clubs International.

News of the possible betting shops acquisition comes a month after William Hill said it had put thoughts of expanding into casinos on the back burner after deciding that gambling deregulation would not offer the hoped-for benefits.

William Hill had previously said it would look at moving into the casino business “if the right opportunity arose”.

In its last financial year, covering the year to December 28, William Hill said its bookmaking division increased profits by 9% to £165.5 million.

That reflected a year of contrasting fortunes after favourable results at Euro 2004 were offset by wins for leading teams in the second half of the period.

[Ahead]

Still seems a rather decent profit,one might think.

[clevfan]

April 19, 2005

Coral may enter Stanley race
By Dominic Walsh



CORAL EUROBET, Britain’s third-biggest bookmaker, said yesterday that it was considering gatecrashing William Hill’s proposed £500 million-plus acquisition of Stanley Leisure’s betting arm.
The group, which is controlled by Charterhouse, the private equity firm, and has about 1,100 betting shops, said: “We are keeping our options open. We believe there are uncertainties surrounding the price and execution of this deal (between William Hill and Stanley).



“We have never lost a competitive auction against William Hill and have added over 300 shops in the last two years.”

Coral’s statement came after William Hill said that it had put plans to return £453 million to shareholders on hold, pending the outcome of negotiations to acquire Stanley’s retail betting arm for “a price in excess of £500 million”.

William Hill, which operates about 1,600 betting shops, confirmed that it was in exclusive talks to acquire Stanley’s 625 shops, of which about 70 are in the Republic of Ireland and the rest are in the UK.

The combined estate of about 2,150 UK shops would lift William Hill above Hilton Group’s Ladbrokes chain, which has 1,920 shops. Ladbrokes, which was blocked from buying Coral in 1998 by Peter Mandelson, then Trade Secretary, is expected to challenge the proposed merger of two of its biggest rivals.

However, William Hill will argue that the market has changed considerably since then, with rivals such as the Tote creating greater competition.

Analysts believe that the deal will be allowed provided William Hill sells between 50 and 100 shops to address potential local monopoly issues.

Rivals including Paddy Power, the Irish bookmaker that has established a presence in London, will probably be interested in small parcels of shops.

Analysts cited Rank, which tried to buy Coral three years ago, as a potential counter-bidder. Private equity firms are also expected to be interested, attracted by the business’s strong cashflow, with Bob Scott, the former Coral chief executive, tipped as a contender.

A source close to William Hill said that, although a takeover of the Stanleybet chain would prevent the planned return of cash to shareholders, there was no reason why, once the integration of the business was completed, it could not revisit the idea.

Although Stanley’s shops tend to be lower grossing than those of its rivals, David Harding, chief executive of William Hill, said refurbishments and moving licences to new premises should enable the company to lift Stanleybet revenues.

The sale of its betting arm would leave Stanley Leisure as a casino operator. Analysts suggested that the move raised the prospect of a merger with London Clubs International.

Shares in Stanley Leisure added 80p to 552p, while William Hill lost 15p to 558p.