CrownBet wins race for William Hill’s Australian business
Stars Group has upped its stake in CrownBet Holdings as the company signed a binding agreement to acquire William Hill Australia.
The aggregate purchase price for both transactions will be approximately US$315m (€255m), of which US$234m will be payable in cash for William Hill Australia and the remainder will be payable in approximately 3.1 million newly-issued common shares of The Stars Group for the increased equity interest in CrownBet.
The binding agreement and Stars Group raising its stake in CrownBet to 80% comes just a week after the PokerStars owner acquired 62% of the operator for a fee of around US$117.7m.
"These acquisitions will further increase our exposure to the attractive regulated Australian sportsbook market and create a player of scale and clear rival to the top two operators there,” said Rafi Ashkenazi, CEO of The Stars Group. “With complementary geographic profiles, we expect the combined business to leverage CrownBet’s operating and proprietary technology platform and be well positioned for growth and to navigate the ongoing regulatory and taxation changes in the Australian market.”
William Hill Australia operates licensed betting over the telephone, online and via mobile phone platforms, but William Hill in January said it was considering selling the division over fears a gambling crackdown in the country could hit profit.
Last month, Bet365 was linked with a move for the business, while Paddy Power Betfair was also said to be interested in acquiring the division.
However, CrownBet has been able to move ahead of its rivals and strike a deal, which is due to go through following regulatory approvals from the Foreign Investment Review Board and the Northern Territory Racing Commission.
William Hill said that disposal proceeds, net of costs, will be used initially to reduce group indebtedness and invested to support further growth.
Philip Bowcock, chief executive at William Hill, said: “The disposal follows a strategic review of the business, launched in January after its profitability came under increased pressure due to the recent credit betting ban and the likely introduction of a Point of Consumption tax.
“The disposal will allow William Hill to focus on continuing to grow our UK Online and US businesses, particularly as we prepare for the decision on the PASPA appeal due in 2018.”
Last month, Crown Resorts said that it had agreed to sell its majority stake in the business amid reports William Hill had been interested in a possible deal.