Hills-GVC agree "revised" Sportingbet proposal
Bidders reach "conditional agreement" to acquire Sportingbet for a revised 56.1 pence a share in a deal valuing the company at £485m.
William Hill and GVC Holdings have reached a “conditional agreement” to acquire Sportingbet for a revised 56.1 pence a share in a deal valuing the company at £485m.
Following a poor set of first quarter results last week which saw Sportingbet’s overall revenues fall 35% compared to Q1 2011, William Hill CEO Ralph Topping and a number of executives held crunch talks last weekend with Sportingbet counterparts in an attempt to drive down the price it would pay for the company.
Topping and his team today succeeded in lowering the fee going from the original 61.1p a share offer to today’s agreement valuing each Sportingbet share at 56.1p. This, however, is still not a firm offer with Sportingbet requesting a third extension until 5pm on 18 December in order to “enable the parties to conclude their ongoing discussions”, a statement read just after 5pm today.
Today’s revised proposal comprises 44.8p in cash, 1.1p dividend in cash and 0.0435 new GVC shares per Sportingbet share for each of the operator’s shareholders. eGaming Review understands that William Hill would pay approximately £418m in cash.
The original price, made before a second extension deadline expired at 5pm today, comprised 48.9p in cash, a 1.1p dividend declared by Sportingbet and the rest in GVC stock, valuing the group at £408m, or £530m including Sportingbet’s convertible bonds and share options.
Today’s revised plans outline a “mix and match” facility under which Sportingbet shareholders would have the opportunity to apply to receive proportionately more cash or more GVC shares.
A number of its largest shareholders including DBS Advisors “ former founders and owners of Sportsbook.com that Sportingbet acquired in July 2001, founder and former Sportingbet chairman Mark Blandford and various Blandford family trusts including Rockridge Investments and Henderson Global Investors that hold 11.2% of shares, today publicly stated they would elect to receive the “maximum amount of new GVC shares available” under the current terms of the deal rather than taking cash.
If this were to happen, and in the event of a formal offer, the cash amount per share available to the remainder of Sportingbet’s “ordinary shareholders” who elect to receive the maximum amount of their consideration in cash, but a minimum in new GVC shares, would be approximately 50.4p, the company added.
eGR understands this could increase to as much as 56p a share if the Sportingbet board gains further shareholder support.
The Sportingbet board has also today confirmed that if such an offer on the terms of the revised proposal were to be made, it would “unanimously” recommend it to its shareholders, the company said in a statement this afternoon.
William Hill and GVC have in turn agreed not to increase or reduce the value of the revised proposal “unless a third party announces a firm or possible intention to make an offer for Sportingbet”, the statement said.
A further announcement will be made as appropriate,” it added.