Caesars Makes Shares Available, Could Help William Hill Bid

Caesars Makes Shares Available, Could Help William Hill Bid

Caesars Entertainment on Monday announced that it has started an underwritten public offering of 30 million shares of its common stock and could use net proceeds to help in its takeover bid of William Hill.

On Tuesday, Caesars announced that the public offering price would be $56 per share.

In connection with the offering, Caesars intends to grant the underwriters a 30-day option to purchase up to an additional 4,500,000 shares of its common stock, Caesars said in a news release.

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The public offering step could raise between $1.5-$1.7 billion for Caesars. It could make Caesars the frontrunner to purchase William Hill.

Caesars Entertainment said on Monday the board of William Hill should recommend its $3.7 billion takeover offer price, according to published reports, which could give it an edge over Apollo Global Management. Apollo has also discussed a takeover bid.

Because of Caesars’ U.S. joint venture with William Hill, it “makes rival offers unlikely,” Goodbody analyst Gavin Kelleher told Bloomberg News. The bid is a 25% premium to William Hill’s closing share price before the takeover interest.

On Monday, Caesars said a successful bid by Apollo would result in the William Hill joint venture losing its rights to operating sports books at Caesars Casino, according to Bloomberg. William Hill has been the primary sportsbook operator for Eldorado, which purchased Caesars in July, since 2018.

Caesars said it expects to use the net proceeds from the public offering for general corporate purposes, according to the news release, and that includes potentially, the previously announced possible cash offer for the entire issued and to be issued share capital of William Hill.

Takeover Bids Announced

This comes on the heels of last Friday’s announcement that New York-based Apollo Global Management and Caesars Entertainment each submitted separate cash proposals to take over William Hill.

William Hill acknowledged the interest from the two companies on Sept 25, releasing the following statement:

"Following an initial written proposal from Apollo on August 27, William Hill received a further proposal from Apollo and proposals from Caesars,” the statement said. “Discussions between William Hill and the respective parties are ongoing. There can be no certainty that any offer for William Hill will be made, nor as to the terms on which any offer might be made.”

Apollo made its initial written proposal for William Hill on Aug. 27, then both the buyout firm and Caesars made further approaches, William Hill said. The two companies have until Oct. 23 to announce they intend to make a firm offer or walk away under U.K. takeover rules, Bloomberg reported.

William Hill and Caesars have discussed merging some of their iGaming operations in the U.S., where William Hill is looking to build scale. William Hill now operates about 170 sportsbooks in the U.S.

Founded in 1934, William Hill one of the world’s largest sports betting companies with offices in 10 countries, according to its website. Chief Executive Officer Ulrik Bengtsson took over the company a year ago and has said it is focused on building its online businesses.

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