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William Hill and Amaya in Serious Merger Talks
- October 10, 2016 By Oliver Young -
Mergers have become quite frequent in the gambling industry recently. Last year, the merger of Paddy Power and Betfair was announced. The merger between Ladbrokes and Gala Coral, two of the leading betting operators in the UK, is expected to be announced every moment now. Earlier this year, William Hill rejected a takeover bid by Rank and 888.
In the past one and a half year there have been numerous mergers and merger attempts in the UK and worldwide. Analysts have concluded that companies are keener to go through with mergers nowadays, because that way they’ll boost their profitability and attain a status of financial stability, which is essential in times of crisis.
That is why the latest piece of news that UK betting giant William Hill and Canadian casino software provider Amaya are planning a merger shouldn’t surprise anyone. There were also rumours that the Scheinberg family, the former owners Pokerstars, will attempt to buy it back from Amaya who currently own it.
Insider Trading Allegations Stopped Amaya’s ex-CEO in the Attempt to Buy the Company
William Hill and Amaya have both confirmed that they are discussing a merger. The two companies released a joint statement. William Hill stated that the company is trying to find a way to improve its online and international business and that the merger is seen as a step towards that goal.
Both parties confirmed that if the merger goes through, it would be a merger of equals. Earlier this year, it was reported that David Baazov, who was Amaya’s Chief Executive back then, had plans of buying the company himself. The company formed a board committee that was supposed to evaluate the offer, as well as all other potential offers.
But, only a month after his plan was made public, Baazov was accused of insider trading by Autorité des marchés financiers, an organization which acts in the capacity of Quebec’s security regulator. Baazov was to be investigated for his role in the acquisition of the Rational Group. This summer he stepped down from Amaya and Rafi Ashkenazi was appointed as new CEO.
It was suggested that GVC Holdings, an Isle of Man gambling operator, was also interested in purchasing Amaya, but that hasn’t been confirmed yet. Earlier this year GVC bought bwin.party and is still working on integrating their products.
A Merger Would Be Quite Beneficial for Both Parties
A merger between William Hill and Amaya will result in the emergence of a new entity that will definitely play a significant role on the gambling scene. It is no secret that William Hill have been trying to improve their online operators. The company released a warning earlier this year in which it was stated that they would earn less this year, as a result of underperformance of their online section.
Amaya too is looking for ways to increase their revenues and improve the company’s reputation especially after the insider trading affair in which their former CEO was involved. After it was announced that William Hill and Amaya are considering a merger, Amaya’s share price rose by 9%, up to CAD$23.41, the highest in the past 11-month period.