William Hill takes injunction against Playtech
William Hill granted court injunction against its own joint venture partner - defensive measure following Playtech's attempts to amend agreement and enter merger talks with rival Ladbrokes.
William Hill Online has been granted a court injunction against Playtech, its own joint venture partner, as a defensive measure to protect its rights following speculation the software supplier entered merger discussions with rival Ladbrokes, a source close to the company has told eGaming Review.
In a statement released at 4pm this afternoon Britain’s largest bookmaker said it had “secured an interim injunction against Playtech to ensure that its legal rights under the William Hill Online joint venture agreements are maintained”.
“Playtech recently initiated discussions with William Hill seeking possible significant amendments to the current William Hill Online joint venture agreements. There has also been press speculation regarding discussions between Playtech and Ladbrokes plc,” the statement continued.
The source said the injunction would prevent Playtech from selling any of its software to Ladbrokes as well as prevent it from restructuring any part of the original joint venture agreement that could in any way enable them to work with its main UK rival. The source also added that Playtech was aware of the injunction and that it would not affect the joint venture relationship.
Playtech issued a brief statement to the stock exchange this morning saying that it had “noted” the announcement made by William Hill regarding the injunction against it adding that its interests in the joint venture “remain unaffected” by its partners’ court action.
James Hollins, analyst at Evolution Securities, said it was understandable that William Hill had resorted to “going down a legal route to ensure exclusivity” and that the likely outcome would be for Playtech to backtrack on its talks with Ladbrokes and its desire to amend joint venture terms as the deal is “high beneficial” to both partners.
On 9 February the Daily Telegraph reported that Ladbrokes had entered into “exploratory talks” with Playtech over a possible £2.2bn merger, however both parties denied this taking place.
In October 2008 Playtech signed an initial five-year agreement with William Hill to supply the UK bookmaker with its online casino and poker solutions. Playtech has a 29% stake in William Hill Online. At the time William Hill chief executive Ralph Topping hailed the agreement with Playtech as “transformational”.
William Hill releases its annual results for the year ended 28 December 2010 on Friday with group chief executive Ralph Topping due to go into more detail regarding the injunction and the Playtech partnership.
As reported in the trading statement issued on 19 January 2011, the performance of the William Hill Online joint venture remains strong and further details on performance will be provided as part of William Hill’s preliminary results announcement on Friday 25 February 2010. William Hill remains committed to the success of the William Hill Online joint venture,” the statement concluded.