William Hill have announced plans to buy out Playtech’s 29% stake in the William Hill Online brand as the two firms renegotiate their relationship in online gaming operations including William Hill Online Bingo.
The buyout option has been the subject of substantial media and investor attention in recent months, as William Hill’s shareholders have sought reassurances over whether or not it would be exercised before it expires.
For the first time, on March 1st, William Hill outlined firm proposals to acquire the stake at a price of around £424 million; Playtech have also issued a statement, saying that they will receive the payment as cash, and will receive a proportional share of earnings up until the date of completion.
William Hill Online bingo homepage, March 1st 2013
In order for the buyout to be completed before the deadline, it must be fully finished by the end of April 2013. However, William Hill and Playtech have more pressing matters to attend to where their online bingo collaboration is concerned, as the bookmakers explain in their statement.
William Hill Online was originally established with eight-year licences for all of its poker and casino software, expiring in 2016; however, the bingo and mobile parts of the site were subject to separate licences. Playtech have since acquired those licences, and the company that provides the mobile and bingo software to William Hill Online.
February 2013 marked the expiration date of the existing bingo licence, which William Hill say is now being renegotiated with Playtech. The mobile licence, meanwhile, is due to expire in October 2013, and will require further renegotiation.
William Hill stress, however, that the licensing arrangements are a separate issue from the William Hill Online buyout option, and as such will be negotiated as any supplier relationship would be, and will not be influenced by the buyout process taking place at the same time.
Ralph Topping, chief executive of William Hill, says: “Having been advised of the valuation of Playtech’s 29% interest, the board has concluded that it is in the best interests of our shareholders to exercise our call option to assume full ownership of this attractive, high-growth, high-performing business.”
Playtech CEO Mor Weizer adds: “William Hill Online has been an overwhelming success and has delivered a cash return to Playtech greater than 3.5 times its original investment, excluding software royalties, in the four years since inception.”
Shareholders at Playtech are now being consulted on the best way for the brand to use the £424 million payout, in order to drive the company’s interests forwards once it is bought out of William Hill Online.
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