Stars Group settles a binding agreement with CrownBet Holdings to acquire William Hill Australia
Reading Time: 2 minutes
Intending to acquire William Hill Australia, Stars Group – the Canadian gaming and online gambling company escalated its stake in CrownBet Holdings as the company penned a binding agreement with the latter.
The aggregate purchase price for both transactions is estimated to be approximately US$315m (€255m), of which US$234m will be payable in cash for William Hill Australia and the remainder will be payable in approximately 3.1 million newly-issued common shares of The Stars Group for the increased equity interest in CrownBet.
The binding agreement and Stars Group hiking its stake in CrownBet to 80% comes on the heels of PokerStars owner acquiring 62% of the operator for a fee of around US$117.7m.
In view of this, Rafi Ashkenazi, the CEO of The Stars Group said: “These acquisitions will further increase our exposure to the attractive regulated Australian sportsbook market and create a player of scale and clear rival to the top two operators there. With complementary geographic profiles, we expect the combined business to leverage CrownBet’s operating and proprietary technology platform and be well positioned for growth and to navigate the ongoing regulatory and taxation changes in the Australian market.”
William Hill Australia operates licensed betting over the telephone, online and via mobile phone platforms, but William Hill in January stated it was excogitating on selling the division over panicking that a gambling crackdown in the country could hit profit.
Last month, Bet365 was linked with a move for the business, while Paddy Power Betfair was also demonstrated their interest in acquiring the division.
However, CrownBet has been able to overtake its rivals and clinch a deal, which is due to go through following regulatory approvals from the Foreign Investment Review Board and the Northern Territory Racing Commission.
William Hill said that disposal proceeds, net of costs, will be used initially to reduce group indebtedness and invested to support further growth.
Philip Bowcock, the Chief Executive at William Hill, said: “The disposal follows a strategic review of the business, launched in January after its profitability came under increased pressure due to the recent credit betting ban and the likely introduction of a Point of Consumption tax. The disposal will allow William Hill to focus on continuing to grow our UK Online and US businesses, particularly as we prepare for the decision on the PASPA appeal due in 2018.”
Last month, Crown Resorts said that it had agreed to sell its majority stake in the business amid reports William Hill had been interested in a possible deal.
Source: European Gaming Industry News