One of Britain’s biggest and most successful bookmakers, William Hill, has announced that it has recommended a cash offer for Mr Green & Co, taking them one step closer to being able to buy the rival bookmaker. They were quick to point out in their statement that it doesn’t constitute an actual offer in itself, but that the statement was in relation to an offer made earlier in the day.
William Hill Holdings Limited, the controlled affiliate of William Hill, made a recommended cash offer to buy Mr Green & Co, which the Board of Directors at MRG accepted. The hope from William Hill is that the addition of Mr Green to the company’s portfolio will give them ‘an expanded pan-European footprint’ in what they consider to be a quickly expanding market.
Why They Want Mr Green
Given William Hill’s position in the market as one of the biggest and best-known bookmakers in the United Kingdom and beyond, the obvious question about the purchase is why they’d want them in the first place. The answer can be found in Mr Green & Co’s position in the European market, given that they have licenses to operate in all of the following countries:
- Great Britain
On top of that, the belief is that the company will obtain the necessary licences to operate in Sweden by the end of the year. Mr Green & Co is a ‘fast-growing, innovative iGaming group’ and it has operations in thirteen markets thanks to its Mr Green and Redbet brands. With both gaming and casino products in addition to the sportsbook, it’s a good company for William Hill to get involved with.
The ‘Core Attributes’ That Will Enhance William Hill
In announcing the decision to purchase Mr Green & Co, William Hill also moved to outline the so-called ‘core attributes’ that the firm sees in the company that it is buying. We’ve already mentioned the international growth that will come with the purchase, but there are other factors that the William Hill board considered before making its offer.
One of the key factors is the improvement that Mr Green & Co will offer to William Hill’s ‘revenue mix’. The fact that it is an online only business will mean that William Hill Group’s share of the online market as well as international revenue will increase. It will also reduce the exposure that William Hill faces with the United Kingdom market.
It’s believed that the purchase will move William Hill’s share of the online market from 42% to 47%, with international revenue shifting from around 14% to closer to 21%. On top of that, the brand will also improve on account of the fact that Mr Green & Co’s strengths are seen as being complimentary to the strengths already boasted by William Hill.
There is also the feeling that Mr Green & Co will provide William Hill with a high growth potential that the company has been lacking in recent years. Mr Green’s growth across all regions that it operates in has been impressive from a revenue point of view, mostly organically. That William Hill will also gain a hub in Malta is seen as an additional positive.
Things Still Need to Happen
The offer that has been made by William Hill still needs to be accepted by both Mr Green & Co’s shareholders and anti-trust approvals. It is expected that completion of the deal will take place in January of 2019, which should ‘accelerate the diversification of William Hill, according to the company’s Chief Executive Officer, Philip Bowcock.
When the transaction is completed, it is expected that it will ‘achieve returns above William Hill’s cost of capital. Synergy benefits of no less than £6 million a year are seen as achievable, with a ‘full delivery’ expected by the third year of completion. That it will also strengthen William Hill’s business and strategy over the long-term is also a benefit of the purchase.