William Hill and PokerStars-owner Amaya in merger talks
Two giants confirm negotiations underway to complete "merger of equals" with GVC also understood to have courted Amaya
William Hill and PokerStars-owner Amaya sent shockwaves through the egaming industry on Friday night by confirming they are in talks to complete what they describe as being a “merger of equals”.
Following a report by Reuters, the two firms released a joint-statement to confirm they were in negotiations to create a market leader across all key egaming verticals.
“Amaya has been undertaking a strategic review of its alternatives since 2016,” the joint-statement read. “Over recent months, the Board of William Hill has been evaluating options to accelerate William Hill’s strategy by increasing diversification by growing its digital and international business.
“The potential merger would be consistent with the strategic objectives of both William Hill and Amaya and would create a clear leader across online sports betting, casino and poker.”
While reports stated private equity groups and GVC Holdings were in the race to acquire or combine with Amaya, the joint-Amaya and William Hill statement would suggest the UK betting giant is the Toronto-listed firm’s favoured option.
And a deal, which would be structured as a William Hill reverse takeover of Amaya, would appear to make strategic sense, with Hills bringing its leading sportsbook and casino products and Amaya able to contribute its PokerStars brand, which holds circa 70% of the online poker market.
A combination would tick Hills’ international expansion box while Amaya would complete its diversification strategy which, whilst having some success in casino, has struggled to gain traction with its sportsbook BetStars brand.
Hills could also move off the iPoker network and give Stars’ liquidity a small bump.
Amaya 2015 revenues amounted to £740m while William Hill’s digital revenues were £550m, which when aggregated would put the combined firm ahead of the 2015 pro-forma revenues of Paddy Power Betfair, which amounted to £1.05bn.
Last month bet365 announced revenues for the 12 months to March 2016 were £1.55bn.
In August, William Hill was subject to a takeover bid from a consortium consisting of Rank Group and 888 Holdings, however, the pair ended their interest after William Hill refused to enter into negotiations.
It is understood Amaya and William Hill had held early stage talks at the time of the consortium’s interest.