Playtech, William Hill clash over Sportingbet acquisition
Dec 23, 2012 (Menafn - Globes - McClatchy-Tribune Information Services via COMTEX) --Playtech Cyprus Ltd. and William Hill plc are clashing over the significance of William Hill's acquisition of the Spanish and Australian operations of Sportingbet plc on the joint venture William Hill Online Ltd.
William Hill and GVC Holdings plc are jointly acquiring Sporting bet for GBP485 million, and dividing its business between them. William Hill will take over Sportingbet's Spanish and Australian operations and GVC will take over Sportingbet's operations in other countries. Sportingbet's Australian operations account for almost half of Sportingbet's revenue, and William Hill believes that the acquisition will boost its online gaming business, which is its main source of profits.
In a statement issued a few hours after the deal was announced, Playtech said, "Under the terms of the shareholders' agreement relating to William Hill Online, William Hill is bound to conduct its remote gambling business through the William Hill Online business, in which Playtech is a 29 percent shareholder. Therefore, if the William Hill/GVC offer is completed, William Hill will be obliged to offer to sell the remote gambling activities of Sportingbet acquired by it to William Hill Online within six months of completion of their acquisition, and Playtech has the right, in its absolute discretion, to determine whether William Hill Online proceeds with the acquisition of the Sportingbet activities."
Playtech added, "Playtech believes that it is likely that the acquisition of the Sportingbet Activities would add considerable value to William Hill Online. The acquisition would offer a range of potential cost and sales synergies including access to new customers in regulated markets including Sportingbet's established business in Australia where William Hill Online currently does not have a footprint. Playtech expects that the potential contribution of the Sportingbet Activities and associated synergies and cost savings will be taken into consideration as part of any valuation of William Hill Online."
William Hill disagrees, saying, "Playtech have no rights to a business that is not part of William Hill Online and therefore this has absolutely no effect on any valuation of William Hill Online."
Playtech also noted that William Hill has initiated the valuation process for William Hill Online as part of its right to exercise its call option over Playtech's in the joint venture. The valuation, due to be completed by February 2013, is based on the value of William Hill Online as a whole with no discount for minority or control premium, and William Hill has until April to decide whether to exercise its option. Playtech argues that the acquisition of Sportingbet will greatly boost William Hill Online's value in the event that William Hill exercises its option to acquire Playtech's stake in the joint venture.
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