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888 cuts price of William Hill takeover by £250 million

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Runners and riders in the Handicap Chase at Aintree Racecourse, Merseyside. (PA)
Runners and riders in the Handicap Chase at Aintree Racecourse, Merseyside. (PA)

Betting firm 888 Holdings has knocked £250 million off the price it is willing to pay for the European arm of rival William Hill, citing “changes in the macro economic and regulatory environment” and the looming UK gambling licence review.

The company announced on Thursday morning that it now valued William Hill’s assets at between £1.95 billion and £2.05 billion, down from the £2.2 billion 888 had initially agreed to pay last September.

The government launched a review of gambling laws in December 2020, amid mounting concern about addiction and children’s exposure via football sponsorship and advertising.

A white paper is due to be published next month and is likely to set out reforms to the industry, potentially impacting the value of gambling companies.

US-based Caesars Entertainment bought William Hill in a $4 billion deal last year but it is selling off its European assets.

The deal gives online operator 888 access to William Hill’s two million active UK customers and its 1,400 UK betting shops.

888 today reduced the cash needed for the William Hill deal from £834.9 million to £584.9 million, due to deferral of part of the payment. It announced plans to raise new equity of up to 70.8 million new shares, around 19% of its issued capital.

It said it would suspend its dividend because the planned acquisition would push its debt higher than previously expected. Instead, it will prioritise repayments to lenders.

It will resume payments once the leverage ratio moves below three times, it added.

Shares in 888 Holdings jumped more than 27% on Thursday morning after the changes in terms were announced.

“The acquisition of William Hill will transform 888in terms of scale and therefore relevance to investors,” analyst Ivor Jones at Peel Hunt said.

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