Hills and GVC granted Sportingbet extension
AIM-listed operator reveals it will work alongside both interested parties to facilitate a formal offer of 61.1p a share, valuing the company at £530m.
William Hill and GVC Holdings have been given an extension of four weeks to make an improved offer for Sportingbet, with the AIM-listed operator holding out for a 61.1p a share agreement.
The two parties had seen an initial bid of 52.5p a share rejected earlier this month, while there were unverified rumours of a second offer also being knocked back ahead of today’s initial deadline.
Now they have until 13 November to return with an offer valuing Sportingbet at approximately £530m, and a statement explains: “The revised proposal includes a ‘mix and match’ facility under which Sportingbet shareholders will have the opportunity to apply to receive proportionately more cash or more shares.”
Sportingbet has confirmed that an offer matching this description would most likely be unanimously recommended to shareholders by the operator’s board of directors, explaining that the board “Has therefore agreed to work with William Hill and GVC Holdings to facilitate the making of a formal offer…”
Today’s statement notes that there is no guarantee of an offer being made before the deadline, and also confirms that the new deadline may be extended if necessary.
Furthermore, analyst Ivor Jones of Numis notes that “It does not appear that Sportingbet has agreed to negotiate exclusively with William Hill. On balance we would expect a higher offer for Sportingbet to emerge from another bidder”.
Issuing a ‘Buy’ recommendation on Sportingbet shares but ‘Hold’ on those of William Hill, Jones suggests the latest developments “[Give] other potential bidders for Sportingbet something “to aim off”.
“We continue to believe that a bidder capable of extracting synergies from Sportingbet’s businesses would be able to pay 90p per share. We believe that Sportingbet is now in play and likely to be seeking such a bidder,” he adds.
Nearly a full month has passed since William Hill and GVC first expressed an interest in making a joint bid for Sportingbet, which could ultimately lead to Hills acquiring its regulated business and GVC taking over its activities in unregulated markets.
Trading in GVC was suspended at 7:30am today with the operator noting in a statement: “Historic financial information in relation to the parts of the Sportingbet’s business which may be acquired by GVC has yet to be extracted from Sportingbet’s consolidated accounts.”
GVC adds that it will make a further statement in due course, and that “These discussions are at a preliminary stage and there can be no certainty that they will be concluded successfully.”
Sportingbet shares are up nearly 4% today to 55p while William Hill’s stock value is up 1.5% to 330.9p at the time of writing. GVC Holdings shares are up 34% since 18 September, a day before the first joint statement of intent to bid for Sportingbet was lodged.