Sportingbet agrees to £530m offer from Hill

If the deal goes through, William Hill, best known for its 2,300 British high street betting shops and which has been expanding overseas, will acquire Sportingbet’s operations in Australia and Spain where gambling is regulated.

GVC Holdings, a junior partner in the deal, will take Sportingbet’s businesses in other parts of the world where regulatory rules are less clearly defined and risks are higher.

William Hill, which employs around 3,000 staff in Yorkshire, including about 1,100 based in Leeds, and GVC have until November 13 to make a formal offer.

The proposal Sportingbet, a sponsor of Leeds United, has agreed to is a mix of cash and stock that would value its shares at 61.1p, up from a 52.5p offer rejected two weeks ago.

Australia is the mainstay of Sportingbet’s business.

The company is a market leader in Australian telephone and online gaming and the unit accounted for almost 70 per cent of company revenues and almost all of its profit in its last financial year.

Analysts said a rival suitor could emerge as there was no exclusivity agreement. William Hill and GVC first said on September 19 they might make a joint offer for Sportingbet.

Ladbrokes, William Hill’s closest competitor in Britain, held takeover talks with Sportingbet last year.

The deal foundered on regulatory worries linked to Sportingbet’s Turkish business. GVC subsequently bought Sportingbet’s Turkish language website. Numis Securities analyst Ivor Jones said: “We continue to believe that a bidder capable of extracting synergies from Sportingbet’s businesses would be able to pay 90p per share. Sportingbet is now in play and likely to be seeking such a bidder.”

But Panmure Gordon downgraded Sportingbet shares to ‘hold’ from ‘buy’, saying the likelihood of a counterbidder was low.