- Media reports that 14% shareholder Parvus Asset Management is pushing for sale
- UK-based William Hill already subject of failed merger bids
- Fixed Odds Betting Terminal legislation could damage bookmaker’s revenue
It is no secret that the profitability of UK bookmaker William Hill has been the subject of intense scrutiny recently, with pressure now coming from a key shareholder for the business to be sold.
One of the biggest shareholders in William Hill, Parvus Asset Management, holds just over 14% of the company in shares and has been pushing for a sale or acquisition, first reported by The Sunday Times late last year. The brand has been deemed to be underperforming year-on-year, and the potential introduction of new, tougher gambling legislation by UK Parliament in relation to fixed odds betting terminals (FOTBs) this year is could worsen the company’s future revenue potential. A huge percentage of revenue is generated solely from FOTBs – up to 50% for many UK-based bookmakers.
The UK’s largest brick-and-mortar gambling company had already been presented with two merger offers last year from Rank Group and 888 Holdings, however these were beaten off.
The PokerStars’ parent company Amaya, a Canadian operator, also offered a merger, which was declined. The deal would have made Amaya the largest global operator of online gambling. GVC Holdings, which recently swallowed up bwin, was also interested in the deal, however its online presence wasn’t large enough in the eyes of William Hill to form a successful merger.
Parvus Asset Management originally pressured the company for a merger, but due to the decline in stock value the company reduced in value. They are now pushing for the bookmaker to sell outright. The chain owns well over 2,000 shops containing FOBTs in the tens of thousands, however the machines are likely to be legislated against later this year, which is set to rock the profitability of the company famous for its fixed odds betting. A takeover or sale is considered more likely to secure the brand name and enhance the performance in years to come, and to help secure the employment of the firm’s 16,000 staff.
William Hill was not commenting to media on the story, but this year is group chief executive, Philip Bowcock, was optimistic about the potential profitability of the firm for the coming year.