Wil­liam Hill’s punt

The Daily Telegraph - - Business - By Bradley Ger­rard

Book­maker heads for US court show­down over bid to stop ri­val’s takeover

WIL­LIAM HILL looks set for a US court show­down over its at­tempts to block a ri­val’s takeover of an Amer­i­can busi­ness that the book­maker has a stake in.

Sci­en­tific Games Cor­po­ra­tion an­nounced in Septem­ber that it planned to ac­quire NYX Gam­ing Group, in a deal worth $631m (£480m) in­clud­ing debt. If Sci­en­tific Games, chaired by Amer­i­can bil­lion­aire Ron Perel­man, were to ac­quire NYX, the com­bi­na­tion could be a for­mi­da­ble com­peti­tor in the bat­tle for mar­ket share in the US sports bet­ting mar­ket.

At the mo­ment, such gam­bling is lim­ited to a hand­ful of US states such as Ne­vada, where Wil­liam Hill has a 55pc mar­ket share. An­a­lysts be­lieve a Supreme Court hear­ing next month on an at­tempt by New Jer­sey to al­low sports bet­ting could pave the way for ex­pan­sion of the mar­ket across other states.

The Bri­tish book­maker, which had a pas­sive share­hold­ing in NYX, has con­verted its stake into one that means it can vote on whether to let the deal pass. The move has an­gered NYX, which has lodged a le­gal com­plaint with the Su­pe­rior Court of New Jer­sey, claim­ing Wil­liam Hill has “re­peat­edly threat­ened to block the ac­qui­si­tion by pur­chas­ing ad­di­tional shares of NYX stock” as well as “ex­er­cis­ing a con­ver­sion right” on its ex­ist­ing hold­ing.

NYX claims Wil­liam Hill’s move to block the deal would be detri­men­tal to it, given it would deny share­hold­ers a 112pc pre­mium on NYX shares prior to the deal be­ing made pub­lic and “lose ap­prox­i­mately $50m and per­haps even more than dou­ble the amount”. NYX also claims that the book­maker has “en­gaged in a course of cat­e­gor­i­cally anti-com­pet­i­tive con­duct” by seek­ing to se­cure con­ces­sions from NYX and Sci­en­tific Games that are “com­mer­cially un­rea­son­able and il­le­gal”.

Wil­liam Hill said it was still con­sid­er­ing the pro­posed ac­qui­si­tion of NYX, and “re­futes in the strong­est terms that any anti-com­pet­i­tive mea­sure has been re­quested or is be­ing de­manded”. It said once its pref­er­ence shares had been con­verted, it would own the equiv­a­lent of al­most 32pc of NYX’S shares, enough to block the bid.

Wil­liam Hill’s in­vest­ment in NYX al­lowed the lat­ter to pur­chase Open­bet, an on­line gam­ing and bet­ting soft­ware com­pany. The book­maker agreed for some of its stake in NYX to be in pref­er­ence shares be­cause Open­bet works with many of its ri­vals.

No court date has been set but the NYX share­holder meet­ing to de­cide on the deal is sched­uled for De­cem­ber 20, while the date to reg­is­ter for vot­ing is De­cem­ber 18.

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