Major shareholder pushes for William Hill sale

Major shareholder pushes for William Hill sale

Tuesday, February 14, 2017
Paper rumours suggest Parvus wants to see change

Major William Hill shareholder Parvus Asset Management, having come out of the shadows to publically voice its disapproval with the failed Amaya merger talks last year, is once more in the news after a report in the Sunday papers indicated it is pushing for a sale of the company.

Though unsourced, the article goes on to suggest that Parvus views GVC as a potential buyer. Previous rumours had said that GVC chief executive Kenny Alexander had been approached about taking up the vacant post at William Hill, adding that as part of those talks the prospect of a merger had been raised.

Sources noted at the time of these rumours that GVC’s Turkish-derived revenues would be an obstacle to such a deal. Turkey remains one of the darkest of grey market territories. Although the attitude of the investment community has been relaxed about GVC’s positioning with regard to the territory, it is not so clear that William Hill would be treated in a similar fashion.

Responding to the news report, Simon French, analyst at Cenkos, said the problem with any sale process for William Hill was timing.

“It is highly unlikely that anyone will make a firm offer for William Hill whilst the government's review into machines and advertising/social responsibility is rumbling on,” he said in a note to clients on Monday. “The article suggests the timing for the findings of this review to be published may have slipped further still until early Summer.”

William Hill remains rudderless despite what has now turned into a long-term search for a successor to previous chief executive James Henderson. Currently the role is being filled by interim chief executive Phillip Bowcock.

The company will be reporting its annual results on 24 February. French noted that the “unanswerable question" for William Hill was what the earnings would look like in 2018 after the full implementation of whatever is proposed by the government following the triennial review later this year.

“Retail makes up circa 55 percent of group EBITA whilst our assumption of a 25 percent increase in online profits appears to be on the generous side given the current operational underperformance,” he added.

William Hill was unavailable for comment.

Totally Gaming says: William Hill has got itself in something of a pickle over the replacement for previous chief executive Henderson, a process not helped by two failed transactions within the past year (one with Amaya the other the rebuffed three-way merger with Rank and 888) and the threat of further UK government action on gaming machines looking over the company. Whatever the merits of the Parvus prescription, the timing of a sale would clearly be awkward right now ahead of any government announcement.

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