William Hill, Britain’s largest bookmaker, expanded into the large Australian gambling market when it and partner GVC Holdings agreed a £485m deal for Sportingbet yesterday.
William Hill is paying £454m for its share of the deal – giving it Sportingbet’s Australian operation and an option to acquire its Spanish business.
Smaller partner GVC will take on the remaining businesses, which are in countries where regulation is less clear cut and investment risks are higher as a conse-quence.
“This is bang in line with our strategy. More online revenues, more international revenues and more regulated revenues,” William Hill chief executive Ralph Topping said.
“We are laying the foundations today of success for the next 30 years,” said Mr Topping, who has been with the company four decades.
The recommended cash and GVC stock deal valued Sportingbet shares at 56.1p, in line with a provisional deal agreed earlier this month.
William Hill and GVC had proposed a price of 61.1p per share but cut the offer after Sportingbet said quarterly revenue fell 35 per cent.
William Hill is best known for its chain of more than 2,300 betting shops in Britain, where it generates more than 90 per cent of its revenue.
However, it is expanding online and in overseas markets where gambling is regulated – buying three businesses in the US state of Nevada earlier this year.
It has also taken a step towards acquiring full control of its fast-growing online joint venture, requesting a valuation for the 29 per cent stake held by partner Playtech.
Setting out the reasons for the Sportingbet deal, William Hill said Australia was one of the largest licensed betting markets in the world.
Sportingbet, which operates in Australia under its own name and the Centrebet brand, had net gaming revenue there of £87.4m in the year to end-July 2012 and EBITDA of £34.8m.
“The Aussie market is very attractive, growth rates are good, the proportion online is taking of that market is very good,” said Mr Topping.
Spain is also an important gambling market and William Hill was one of a number of companies to enter the market after new licences were issued earlier this year.
It said Sportingbet’s Spanish business would allow it to achieve critical mass there more quick- ly.
Mr Topping added: “Our unique combination with GVC provides a complete solution for Sportingbet and its shareholders and we look forward to working with the management and employees of Sportingbet in Australia and Spain to combine our joint experience and expertise to create additional value for our customers and shareholders.”