William Hill Seeks Playtech Online Gambling Stake
by Renee Israel Top UK bookmaker, William Hill, has until next month to decide whether to activate a call option to purchase Playtech's 29% stake in their joint William Hill Online venture. The fact that William Hill has called Playtech's share option means that it has already started the process of valuing Playtech's stake in what has proved to be a highly lucrative venture. In fact, according to industry analysts, Playtech's almost 30% stake in the William Hill Playtech online gambling venture is likely valued at between £300 million and £493 million. As a result, both firms will appoint banks to determine a fair price for the 29% stake, and a third party may be brought in if the estimates are too far apart to bridge in the first step. Analyst for Deutsche Bank, Richard Carter said: "I think it's likely William Hill would issue some equity to raise money as I don't think they want to take on more debt in order to acquire lots more online earnings than their retail stores." William Hill and Playtech Joint VentureWilliam Hill and Playtech entered into the successful joint venture in order to create a powerful online gambling platform.However the relationship has been tumultuous at times, including staff walkouts in offices in Bulgaria and Tel Aviv, and the need for Ralph Topping, CEO of William Hill to fly out to these offices in order to restore order. Since these rather bizarre events last autumn, William Hill and Playtech have maintained a cordial and professional relationship, however it is no secret that William Hill wants full control over its fastest and more profitable division and is keen to end Playtech's veto over areas such as acquisitions. William Hill is also bothered by Playtech's desire to work directly with its high-street rival, Ladbrokes Last year, Will Hill was forced to take an injunction out to prevent Playtech from selling its stake in the online gambling venture. Playtech has flexed its own muscles by vetoing against William Hill's plans to purchase mobile betting operator, Probability. William Hill 3rd Quarter Trade FiguresOn Friday, William Hill released its third quarter trade figures, showing that operating profit from its online division climbed 42% during the three months leading to September 25th.Online numbers were boosted by wagering on the European football championships, as well as the London Olympics, however these sporting events impacted retail in a less positive way. "The Olympics and Paralympics captured the public's attention but appear to have reduced customer visits in retail," said Ralph Topping. |
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