William Hill aims to reduce UK exposure through MRG deal

Acquiring MRG will help to reduce William Hill’s exposure to the UK market, according to the offer document published (December 4) by the operator.

In outlining the strategic rationale behind the offer of SEK69 per share, which values MRG at SEK2.82bn (£242m/€271m/$307m), William Hill explained in the document how the majority of its £1.7bn annual revenues are still derived from the UK.

However, the online-only MRG holds remote gambling licences in Denmark, Italy, Latvia and Malta, as well as Great Britain and Ireland. The company also expects to obtain Swedish licences by the end of the year ahead of the re-regulated market opening on January 1, 2019.

“MRG’s online-only business will increase the William Hill Group’s share of revenue and profits from online as well as from outside the UK, and reduce William Hill’s exposure to the UK market,” the document explained.

Based on the first six months of 2018, acquiring MRG would have boosted William Hill’s overall online revenue, excluding the US, from 42% to 47% of the group total, while the proportion of revenues from outside the UK would have increased from 14% to 21%.

William Hill also stressed MRG’s high growth potential, which was underlined in October when the operator posted a 50.9% year-on-year increase in revenue to SEK445.2m for the three months through to the end of September.

When the offer was first disclosed in October, William Hill CEO Philip Bowcock (pictured) said that the takeover would allow the bookmaker to become “a more digital and more international business”.

The offer document yesterday also saw William Hill extend the acceptance period for its offer due to the anticipated timeframe for receiving the required approvals from “competition authorities in a number of jurisdictions”.

Whereas when the initial offer was announced, the initial acceptance period was expected to run from December 10 to January 11, it will now run until January 17, allowing time for “when such approvals can reasonably be expected”, William Hill said.

“If for any reason the review by the competition authorities would take longer than reasonably expected, and the necessary approvals are therefore not obtained before the expiry of the acceptance period, the acceptance period will be extended,” the bookmaker added.

Settlement of the deal is expected to begin around January 25, although a target completion date has not been set.

The offer is conditional upon at least 90% of MRG’s shares being acquired, at which point William Hill will delist the operator from the Nasdaq Stockholm exchange.

As previously stated by MRG, 40.4% of shareholders have already signed irrevocable agreements endorsing the offer.

In the document published yesterday, it was confirmed that those shareholders are Henrik Bergquist (13.53%), Hans Fajerson (12.1%), Fredrik Sidfalk (7.37%), Karl Trollborg (2.76%), Martin Trollborg (2.43%), Tommy Trollborg (1.03%) and Anita Trollborg (0.82%).