It would appear that there is no end to the potential suitors lining up to merge with William Hill. This time it is Canadian based company Amaya, the operator of PokerStars.
The merger is valued at £4.5bn, and if it were to go through, would represent the largest deal between online operators the industry has ever seen. That includes the still to-be completed Ladbrokes-Coral deal.
It is not just UK records this deal threatens to break, but global ones as well. The potential merger would also be the largest global online gaming merger by EBITDA and the second largest by revenue. Undoubtedly, this represents William Hill reinforcing their decision to walk away from, what they considered, a poor recent valuation by 888Sport.
Amaya, as the operator of PokerStars, is currently valued at approximately £1.9bn after shares rose by a third this year. William Hill is currently valued at just under £2.6bn after shares fell in value by a quarter since January. In August, William Hill reported a 16% fall in operating profits to £131.1million, attributed to problems with its online business.
Currently, talks are non-binding, meaning no agreement may ever be reached. Even if this deal were to progress, a decision may take some time due to the enormous sums at stake. There are also many factors that William Hill will need to consider.
For starters, the merger would open them up to greater exposure in unregulated markets. Additionally, the online poker market (despite PokerStar’s overall strong performance) is seen to be flagging. Finally, the timing could not be worse for William Hill. As we mentioned in a previous Heads&Heads blog, William Hill is currently without a CEO to oversee the integration of the two companies.
In short, there is a long way to go yet before this deal is finalised. However, if it were to go through, this merger would represent a new super power in the online gambling world. How this will affect matched bettors is anyone’s guess.