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Two bidders for William Hill Australia have been granted due diligence access to the business, the Australian Financial Review has reported citing unnamed sources familiar with the matter.
British bookmaker William Hill announced in January that it had decided to review its underperforming Australian business and that a sale was under consideration. The Australian Financial Review reported earlier this week that four rival gambling operators had submitted their offers by Monday morning, with those four reportedly being bet365, Paddy Power Betfair, Ladbrokes, and local betting operator CrownBet.
It is understood that Paddy Power Betfair’s Australian business Sportsbet and CrownBet have been shortlisted and given access to confidential information about William Hill’s Australian operations. The information will play important part in setting the final price of the sports betting business. It is believed that it would be valued at around A$200 million. William Hill Australia currently holds a 5% share in the nation’s sports betting market.
The British bookmaker expanded into Australia in 2013 when it acquired the Australian and Spanish operations of Sportingbet as well as the Centrebet and Tom Waterhouse brands from local bookmaker Tom Waterhouse. The three businesses remained under the stewardship of Mr. Waterhouse, as William Hill wanted to leverage his experience in the field and his connections across Australia.
A Bidding War amid Regulatory Changes
William Hill’s underperformance in Australia combined with the recent regulatory changes introduced in the country at a state and federal level could be considered the main reason why the operator has decided to leave the local sports betting field.
Several Australian states have decided to implement a 15% point-of-consumption tax that would require operators to contribute a portion of their revenue to the jurisdictions they target players from and not just to the jurisdictions they are licensed in. A federal ban on credit betting and the click-to-call betting feature, previously deployed by offshore operators to exploit a loophole into Australian betting laws, have also been part of the recent wave of changes in the nation’s gambling regulatory landscape.
These reforms were expected to intensify greater merger and acquisition activity within the betting space and the William Hill Australia sale comes as a manifestation to these expectations.
Paddy Power-backed Sportsbet is understood to be one of the bidders for William Hill’s Australian operations. It is currently the largest corporate bookmaker in the country, holding a 15% of the local wagering market. As for CrownBet, the other bidder, it was announced earlier this week that Canadian gambling giant The Stars Group has entered into agreement to buy a 62% stake in the operator from its current majority stakeholder Crown Resorts.
The Stars Group has partnered with other CrownBet shareholders to complete the deal, including its founder and current CEO Matthew Tripp. The Canadian gambling giant thus secured its entry into the Australian betting market.
According to the Australian Financial Review, the winning bidder for William Hill’s Australian business could be announced next week. William Hill has hired financial group Citi and law firm Clifford Chance to advise it through the sale. The company’s Australian business recorded turnover of A$2.55 billion, revenue of A$201.1 million (down 1% year-on-year), and operating profit of nearly A$30 million (up 11%) last year, according to its recently released financial results.
The post Race for William Hill’s Australian Betting Business Narrowed to Two Bidders appeared first on Casino News Daily.
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