888 announces that it has reached an agreement with Caesars Entertainment to modify certain terms of the William Hill Non-US Business Purchase and Sale Agreement. In this regard, the group highlights that the changes reflect the current macroeconomic environment, as well as compliance factors.
We must mention that, after the official announcement of these changes, the price of 888 Holdings on the London Stock Exchange has skyrocketed, at the end of the session the price was 2.31 pounds compared to 1.92 it registered at the close of the Wednesday.
Below are the highlights of the new terms agreed for the acquisition of William Hill, which is expected to be completed in June 2022:
- The value of the company was reduced from £2.2 billion (€2,641 million) to £1.95 - £2,050 million (€2,460 million, including £0.1 billion of IFRS-16 capitalized leases).
- Reduction of £250 million (€300 million) in the consideration payable on Completion.
- Up to £100 million (€120 million) of deferred consideration payable in 2024, based on the Adjusted EBITDA of the Enlarged Group in 2023, to be settled in cash or 888 shares.
In order to finance the Acquisition, 888 has fully committed the debt financing of J.P. Morgan, Morgan Stanley, Mediobanca and Barclays Bank PLC of approximately £2.1 billion (2,521 million euros)
888 intends to issue up to 70.8 million new ordinary shares in the Company's capital. Placing has been chosen as it minimizes the time required to raise the intended proceeds, noting current market conditions.
888 explains in a press release that the changes in the terms of the sale reflect the change in the macroeconomic and regulatory environment since the announcement of the Acquisition, as well as the compliance factors impacting WH's business, including the actions taken as part of an ongoing review by the UK Gambling Commission.
In connection with the ongoing license review by the Gambling Commission at William Hill, the Seller has agreed to indemnify the Termination UK licensed entities in respect of certain potential losses and costs arising from the license review.
The group confirms that its Board of Directors continues to believe that the Acquisition represents a transformational opportunity for 888 to significantly increase its scale, further diversify and strengthen its product mix and build leadership positions in several of its key markets.
Thus, in addition to the strategic benefits, the combination of 888 and William Hill is expected to generate significant operating efficiencies. More specifically, as a result of the synergies they expect to accumulate £5m (6 million euros in 2022), £54m (64.8 million euros) in 2023, £70m (84 million euros) in 2024 and £100m (120 million euros ) in 2025.
The Group will continue to focus on regulated markets, developing and improving safer gaming processes and raising industry standards, leveraging the knowledge of 888 and William Hill to ensure customer protection remains the top priority.
The Board has approved the Acquisition under its revised terms, it is therefore expected that the General Meeting for the approval of the Acquisition by the shareholders will be held in May 2022 and will be approved unanimously
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