Sportingbet rejects Hills/GVC takeover bid
Initial £350m offer was turned down over weekend - Hills and GVC expected to make improved bid before 16 October deadline.
Sportingbet has turned down a £350m joint takeover offer made by William Hill and GVC, leaving the companies just two weeks to sumbit an improved bid.
News of the proposed takeover attempt broke in September, with Hills poised to acquire Sportingbet’s Australian business and “certain other locally licensed businesses”, with the remainder going the way of GVC.
However according to The Sunday Times, an initial bid valuing Sportingbet at £350m “ 52.5p a share “ has been snubbed by the online gambling operator, which has seen its share price rise by almost 16% since talk of a takeover bid began.
Hill and GVC now have until 16 October to lodge another formal bid, and are expected to come back with a higher offer.
Many brokers suggest a successful bid would need to represent more than 60p a share, valuing the company at approximately £400m, despite Sportingbet’s share price remaining at a little over 52p and having been worth just 27p at the end of May this year.
The takeover would see Hills reenter the Australian market, which it left earlier this year in a move to clear the way to gain a licence and painlessly enter the Nevada egaming market. The operator had reportedly been in discussions to take over Australian operator Centrebet in May 2010 before it was acquired by Sportingbet itself last year for a nine-figure sum.
The Australian business contributed some 90% of Sportingbet’s profits in its most recent financial results.
Approximately 70% of Sportingbet’s revenues come from regulated markets, with Hills potentially set to see the benefit of the strong Miapuesta brand in Spain and the local Danbook and Scandic brands in Denmark, where the London-listed operator is yet to apply for a licence and where Sportingbet was among the first wave of accredited egaming companies.
In October last year, Sportingbet was subject to takeover or merger speculation, with a proposed merger with Ladbrokes breaking down amid reports of “legacy risk” issues.
Sportingbet and William Hill both declined to comment when contacted by eGaming Review.