William Hill Australia has become the subject of a four-way bidding war just days after the company announced a $424 million write-down on its Aussie assets.
Revealing its annual results on February 23, William Hill noted an overall loss of $133 million thanks, in part, to a downturn in its Australian assets.
Following a crackdown on credit betting and potential tax increases, William Hill announced it was undertaking a “strategic review” of its Australian business back in January.
“While we remain one of the few profitable companies in the market, that profitability would be significantly impacted if, as is anticipated, further states introduce an additional 15 per cent point-of-consumption tax in the coming months and years,” a company representative told the media at the time.
Changing Conditions Force Sale
With current William Hill chief executive Philip Bowcock admitting Australia is now a “different place” to when the company embarked on a $700 million spending spree, a sale now looks inevitable.
According to a report by the Australian Financial Review, four major operators submitted bids to Citigroup ahead of a February 26 deadline. Although individual offers are sealed, it’s been suggested that Ladbrokes, bet365, Sportsbet (owned by Paddy Power Betfair) and Crownbet have come in at the $200 million mark.
The companies rumoured to be in the running for TomWaterhouse.com, Sportingbet Australia and Centrebet have all been through due diligence procedures in recent weeks. With much of the legal paperwork already complete, any sale is expected to be pushed through at a swift pace.
As it stands, media requests for comments on the likely winner have been referred to William Hill’s UK office. However, one potentially interesting twist could come courtesy of the recent news that The Stars Group has purchased a majority stake in CrownBet.
Could Stars Group Take Control in Oz?
Announced on February 27, the takeover is worth $150 million and will see the parent company of PokerStars acquire Crown Resorts’ 62 percent equity in the company. CrownBet founder Matthew Tripp will remain as CEO.
Beyond this, the revelation that CrownBet has submitted a bid for William Hill’s assets could mean the owner of the world’s largest poker site is poised for an assault on the Australian market. Although regulatory changes in 2017 outlawed online poker, senators such as David Leyonhjelm believe there could be a reprieve on the horizon.
If that happens and The Stars Group is successful in its bid for William Hill’s Australian business, it could open up some interesting opportunities in the poker and sports betting sectors in the coming months.