In a development that could have far-reaching ramifications for the gambling industry, it has emerged this week that Caesars is now it an advanced stage of negotiations to acquire William Hill ADR (OTCMKTS:WIMHY). The discussions are on with regards to an acquisition worth as much as $2.9 for the British bookmaker. William Hill stock has rallied strongly on the back of the news.
Last Friday, William Hill ADR (OTCMKTS:WIMHY) soared by as much as 42% as investors piled on to the stock. The prospective deal is going to get Caesars’ complete control over William Hill’s online operations and sports betting business in the United States. Those businesses have generated significant growth in recent times.
The two companies released a joint statement with regard to the potential deal. Caesars has made an offer amounting to 272 pence per share and William Hill has revealed that it is going to recommend the shareholders to vote in favor of the deal.
It should be noted that Caesars already has a 20% stake in a JV with William Hill in the United States. The buyout specialists Apollo had also made a bid to acquire William Hill but it has not yet responded to the latest developments.
A potential multibillion-dollar deal has naturally resulted in a lot of interest in the stock, and it has rallied and held most of the gains in reaction to it. However, Stifel analyst Bridie Barret has stated that the deal actually undervalues William Hill. He revealed that the price per share of William Hill should be in the range of 270 pence and 400 pence.
That being said, investors should also keep in mind that that earlier on in May, William Hill had revealed that its revenue had dropped by a massive 57% owing to the coronavirus crisis. The stock is likely to be in focus today and investors could consider keeping an eye on it.