Online gambling firm 888 soars on deal to pay less for William Hill assets
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April 7 (Reuters) - British online gambling firm 888 (888.L) will pay a smaller price to buy William Hill's international assets from U.S.-based owner Caesars Entertainment (CZR.O), the companies said on Thursday, citing changes in economic and regulatory conditions.
Shares in London-listed 888 soared nearly 30% after the British company also said it would have to raise less capital to partly fund the purchase.
Las Vegas-based casino operator Caesars bought British bookmaker William Hill in a $4 billion deal last year and agreed in September to sell William Hill's non-U.S. assets to 888 for 2.2 billion pounds ($2.88 billion).
The purchase, 888's largest since listing in London nearly two decades ago, will give the online pure-play company access to William Hill's 2 million active UK customers and 1,408 betting shops across the UK.
The two companies have agreed that the assets now have an enterprise value of between 1.95 billion pounds and 2.05 billion pounds.
That means 888 will have to pay a cash consideration of about 585 million pounds, nearly 30% below the previously agreed 834.9 million pounds, 888 said.
William Hill is subject to an ongoing licence review by the UK's gambling commission and is addressing action points raised by the regulator in relation to its "social responsibility and anti-money laundering obligations", 888 said in the statement.
The review comes at a time when British businesses are facing rising inflation and consumers are struggling with a cost-of-living squeeze.
888, which has online sports betting, poker and casino platforms, said it now plans to issue up to 70.8 million new shares, which represents about 136 million pounds as of Wednesday's close, versus prior plans to raise about 500 million pounds.
Analysts at Jefferies said in a note they believe the deal "makes strategic and financial sense", adding that this will materialise in 888's balance sheet.
The acquisition is expected to be completed by June 2022.
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