Can two troubled gaming companies join forces to create a “clear international leader” in iGaming?
That’s the contention brought up by the boards of directors of William Hill and Amaya late last week when they confirmed that the two companies are talking about a merger as had been reported by Reuters. The possible deal continues a flurry of consolidation in the iGaming sector over the past year, which saw Betfair and Paddy Power merge, Ladbrokes and Gala Coral finalizing their deal, and GVC Holdings buying Sportingbet in 2015, outbidding 888.
In fact, William Hill recently spurned a takeover bid from 888 and the Rank Group that was valued at ?3 billion. The market cap for William Hill is today ?2.15 billion and Amaya, whose stock is down 23 percent over the past year, is valued at ?3.4 billion. The Amaya board also said it had received interest from GVC Holdings as well as the William Hill talks.
Both companies have had troubles recently. William Hill has been without a chairman since James Henderson stepped down in July after questions about his digital strategy were raised. The company had previously tried to acquire both Rank and 888 but was unsuccessful in each case.
As for Amaya, it’s been downhill since the company purchased PokerStars and Full Tilt for almost $5 billion in 2014. But insider trading charges against then-CEO David Baazov were raised. Baazov stepped down from that position, and later resigned from the board, saying he was organizing a plan for a buyout that would take the company private. According to the Reuters report, that plan is no longer being considered. Baazov no longer plays any role in the company outside of his equity ownership. Rafi Ashkenazi is the current CEO of Amaya.
The one bright spot for Amaya over the past year was being granted a license by the New Jersey Division of Gaming Enforcement to participate in legal iGaming in that state. But the license was granted only days before the Baazov insider trading allegations surfaced, and investigations continue into those charges.
Should a deal between Amaya and William Hill be consummated, it would be an all-stock transaction, according to the Wall Street Journal. The deal would indeed create an international iGaming powerhouse. In addition to PokerStars and Full Tilt, Amaya provides technology-based products and services in global gaming and interactive entertainment, while William Hill is a bookmaking leader with betting shops in the UK, online sports betting and casinos, and operates race and sports books in Nevada, as well as mobile sports betting in that state.
