Corporate Raider or Hedge Fund Activist, bosses at UK heritage bookmaker William Hill are this week mulling their response to an audacious £115m (US$147m/€125m) share buy-up by New York-based HG Vora Capital.
The left-field manoeuver represents a 5.1 per cent acquisition of the company’s assets and reignites speculation over the FTSE250 betting group’s future.
HG Vora is led by former Goldman Sachs VP Parag Vora and the move on William Hill comes out of a tried and tested playbook.
In 2018 the investor took a five per cent stake in Caesars Entertainment (CE) –proud owners of the landmark Caesar’s Palace casino in Las Vegas–and was a principal agitator for CE’s US$17b (£13.3b/€14.5b) sale to Eldorado Resorts, which finalised this July.
The company, which has a 10 per cent stake in Gamesys, the UK-listed owner of Jackpotjoy, among other online gambling brands, also previously invested in Penn National Gaming and Pinnacle Entertainment before they too agreed to merge.
Leading sources in the gambling community say this latest round of heavyweight financial action shows that the stateside betting business, despite the coronavirus Covid-19 pandemic, is “alive, well and kicking”.
William Hill, it should be noted, is likewise seeking to aggressively expand its operations in all 20 US states where gaming is regulated. It has formed a joint venture with Caesars Entertainment, which owns 20 per cent of its American arm William Hill US, as a vehicle to drive investment and acquisition.
Last June, 2019, in a 24-hour buying blitz–powered by Chairman Roger Devlin and Group CEO Ulrik Bengstsson—the UK bookies snapped up a spectacular £225m (US$287m/€245m) worth of US gambling assets.
Markets, meantime, have responded positively to William Hill’s US drive, which last week saw the firm’s share price close at a year-high of 220.00 GBX.
Yet, amid the volatility of Covid-19, hunter can just as easily become hunted, warn observers.
And William Hill itself may fall prey to a big US player, as gambling groups seek to diversify top heavy, land-based, portfolios.
The FTSE250 company is no stranger to hostile corporate raiders.
In 2017 they successfully beat off one of their former investors, Parvus Asset Management, who tried to reverse engineer a company sale.
For the moment, both William Hill and HG Vora are keeping their powder dry and lips sealed.
But it’s a gambling cert that this ballad is not yet sung.