Caesars entertainment has agreed to buy william hill in a 2.9bn deal that would give the casino operator a stronger foothold in the us sports gambling market.
Each share of the london-listed company will be valued at 272 pence, which is an 80.7 per cent premium to the volume-weighted average of its share price over the past three months. however, the valuation is slightly lower than the bookmakers closing price on tuesday.
William hill said last week it had also received two approaches from the private equity group apollo global management but caesars warned it would cut off their joint venture that allows the bookie to offer sports betting in its casinos, if the rival offer was accepted.
A deal would help caesars to expand into the lucrative us sports betting market, where the british bookie has been making inroads since sports betting has been gradually legalised across states.
The opportunity to combine our land based-casinos, sports betting and online gaming in the us is a truly exciting prospect, said tom reeg, chief executive of caesars.
However, a tie-up will raise questions about the future of william hills operations outside the us, which caesars has indicated that it would entrust to partners or new owners.
The william hill board believes this is the best option for william hill at an attractive price for shareholders, said roger devlin, chairman of william hill.
Some analysts have argued that the gambling group should have held out for a higher offer. we see such a value of 2.9bn as far too low and folding too early given the long-term potential in the us, said greg johnson, an analyst at shore capital.
The deal requires approval from william hill shareholders.