William Hill may buy out Playtech's 29% stake
WILLIAM HILL has made a raft of senior management changes at its internet business, as the British bookmaker confirmed it was considering the buyout of the minority stake in William Hill Online held by software gambling provider Playtech.
The FTSE 250 bookmaker said yesterday that Henry Birch would step down as chief executive of William Hill Online with immediate effect, leaving the day-to-day running of the business to managing director Andrew Lee.
The changes follow the move by William Hill to seek a price for the 29 per cent stake in William Hill Online owned by Playtech. William Hill has until next month to activate a call option for the stake, and the decision is likely to hang on the price.
Each party will appoint a bank to determine a price, and if their valuations are markedly different, a third independent bank will be asked for an assessment. Valuations have ranged from £300 million up to £493 million.
William Hill Online, one of the biggest online gambling operations in Europe, in April reported a 29 per cent rise in operating profit to £38.3 million, buoyed by a 370 per cent rise in the amounts punters bet using mobile devices.
The management changes came as William Hill reported a 26 per cent year-on-year increase in third-quarter operating profit, driven by the summer of sport that included the London Olympics and the European football championships.
Operating profit from its online division rose 42 per cent in the 13 weeks to September 25th, compensating for lower demand on the high street, pushing up retail net revenues just 3 per cent.
“The Olympics and Paralympics captured the public’s attention but appear to have reduced customer visits in retail. However, there were compensating factors, particularly the strong margin growth across all channels,” said chief executive Ralph Topping. “We’ve had a good performance in football, including a strong Euro 2012 in July. It’s also pleasing to see signs of improvement in horseracing margin trends.”
William Hill is also looking to buy Sportingbet in a deal with GVC Holdings, and this week had a £530 million cash and shares offer provisionally agreed by the Sportingbet board. – (Copyright The Financial Times Limited 2012)