Amaya Inc. in Talks with William Hill about Merger
The Canadian-based company Amaya Inc is currently in talks with William Hill, one of the most well-known bookmakers in the world, about a possible merger. William Hill operates the largest network of betting services in the United Kingdom while Amaya Inc, is the holding company of PokerStars, the world’s biggest online poker room. A joint statement was released by both the companies on October 7th which formally confirmed that discussions had begun about the possibility of a merger.
This year has been an interesting time for Amaya Inc, with a number of internal twists and turns. Earlier in 2016, CEO of Amaya, David Baazov, showed interest in buying out the company at C$21 per share. A special committee was formed at Amaya Inc to review Baazov’s proposal as well as a number of options from other interested parties. A month later, Quebec’s regulating body – Autorité de Marchés Financiers – filed charges of insider trading against Baazov and his associates. Baazov decided to resign from his position at Amaya Inc in order to clear the charges.
In the meantime, Rafi Ashkenazi was hired at first on an interim basis to fill the post. This later became permanent in August after it was made known that Baazov had decided to completely resign from all company undertakings at Amaya Inc. This kind of internal dynamics isn’t that unusual, however, and it’s not clear how these events may have affected the current talks, if at all.
To confirm the rumors and offer official information to the press, a William Hill representative stated that “the boards of William Hill and Amaya note the recent press speculation and confirm that they are in discussion regarding a potential all share merger of equals. The merger would create a clear international leader across online sports betting, poker, and casino”.
In 2015, it was William Hill that was looking to purchase 888 Holdings. Online betting megabrand 888, offers a huge range of online gaming services from online casino to sports betting and of course 888poker, the second largest poker network in the world. William Hill’s offer wasn’t high enough for 888 Holdings.
Earlier this year, something similar happened, but in reverse. 888 Holdings teamed up with The Rank Group to form a proposal that would buy out William Hill, but after two unsuccessful negotiations, William Hill didn’t receive a bid that was attractive enough.
It’s quite clear that William Hill has been looking to broaden its global presence and online betting operations. In March 2016, the company informed shareholders that it would record a decline of £25 million in profits from its online gambling business. A merger with Amaya Inc. would most likely assist William Hill in turning that slump around. Still, representatives from both William Hill and Amaya Inc. have confirmed that although discussions about a merger are taking place, the outcome of those discussions is still very much up in the air. If the companies do decide to move forward towards a merger, the agreement will be based on an all share merger of equals.
By making public the new agreement discussions with William Hill, Amaya Inc boosted its share prices to C$23.41. This is an increase of 9%, overtaking all previous share prices in the last 10 months. But William Hill isn’t the only contender for a merger with Amaya. Although unconfirmed, there have also been rumors that GVC Holdings and a number of other private investment companies are also interested in acquisition of the company, in the event that nothing materializes from the current talks with William Hill.