Caesars Gets a Green Light on the William Hill Takeover
On April 20, 2021, the US court cleared the William Hill takeover by the US casino group Caesars Entertainment. With the court decision, this British bookmaker and owner of the top-ranking gambling sites in the US got the green light to conclude the $4 billion ($2.9 billion) Caesars takeover and delist from the US stock exchange on April 22. Caesars anticipates that their joint venture with William Hill will bring a $600 million – $700 million revenue during this financial year.
The court process has been postponed for three weeks due to the board dispute with two hedge funds, HBK Capital Management and GWM Asset Management. The hedge funds have sent several protest letters to the board of William Hill. They accused the board of not disclosing “potentially material” information regarding the joint venture with Caesars, thus eliminating the possibility of another company participating in the bidding process.
HBK hedge fund, a company with a 10% exposure to William Hill, argued that the shareholders voted on a proposal for which they didn’t have enough information to evaluate the takeover adequately. HBK claimed that if this information had been available to shareholders, they might have voted differently. According to the hedge fund, this also prevented an auction from taking place, where the company might have gotten a higher selling price from someone else. GWM agreed that relevant information was withheld and said the outcome is “incredibly disappointing.”
William Hill took a gamble with this deal. Its shares dropped more than 2% when the US betting powerhouse announced the joint venture likely becoming effective after the court’s clearance.
As for the court, judge Alastair Norris said that the offer had not delighted all shareholders, as five hedge funds and one private investigator objected to the ruling. Nevertheless, the judge deemed the deal documents comprehensive enough for shareholders to make an informed decision.