William Hill’s punt
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.