BY CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL
LAS VEGAS REVIEW-JOURNAL
Posted: Oct. 1, 2012 | 9:58 a.m.
Online gambling company Sportingbet Plc has turned down a $564.9 million offer by William Hill Plc and GVC Holdings Plc, saying the bid "significantly undervalues" the company, but it left the door open to consider a higher bid.
"The board of Sportingbet has responded that this indicative offer significantly undervalues the business and its future prospects," the company said in a statement Monday.
Sportingbet did not say it was rejecting of offer outright. The gaming company expects a "further announcement will be made in due course."
Sportingbet operates sports books in the United Kingdom, Australia, Spain and other jurisdictions worldwide, as well as virtual games, casino websites and online poker.
William Hill, owner of William Hill U.S. and 159 sports books and kiosks in Nevada, is looking to acquire Sportingbet's regulated assets in Australia and Spain and sees GVC Holdings as a partner to take over the unwanted assets. It's a partnership Ladbrokes Plc tried but failed to make work when it looked at buying Sportingbet last year. Ladbrokes owns 65 percent of Stadium Technology Group, a Las Vegas-based supplier of software and in-game betting applications to sports book operators.
GVC Holdings bought Sportingbet's unregulated Turkish business last year for $183.6 million.
Jefferies analyst James Wheatcroft said last week William Hill's rationale for the deal is the acquisition of a regulated, leading bookmaker in Australia with the possibility of "deregulation" allowing online poker and in-play betting.
Wheatcroft valued William Hill's purchase of Sportingbet's preferred assets at $609.6 million, or "eight times prospective consensus" EBITDA, also known as earnings before interest, taxes, depreciation and amortization.
William Hill has eyed a return to the Australia since its exit earlier this year. The British bookmaker closed its online wagering business in Australia on June 4 as its license application was pending with Nevada gaming regulators. William Hill was licensed in Nevada on June 21.
William Hill and GVC Holdings have until Oct. 16 to announce a firm offer. Analysts say Paddy Power could be a potential counterbidder given its stable and profitable position in the Australian gaming market.
William Hill also has until November to decide whether to exercise its option to purchase Playtech Ltd.'s 29 percent stake in its online sports and casino business, William Hill Online.
"Both deals highlight William Hill's confidence and ambition, based on a platform of decent momentum in the last few years," Wheatcroft said in a 20-page company note released Sept. 24.
Contact reporter Chris Sieroty at csieroty@review journal.com or .
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