William Hill PLC and PokerStars owner Amaya Inc of Canada ended merger discussions, squelching one of the biggest possible deals in the betting industry, after the UK bookmaker’s largest shareholder voiced opposition to the move.
William Hill will continue to consider strategic alternatives where they have the potential to create shareholder value, the London-based company said in a statement yesterday.
The company will restart share buybacks, which it suspended in July, it said.
In a separate statement, Amaya said its board concluded that remaining an independent publicly traded corporation best positions it to deliver long-term shareholder value.
“After canvassing views from a number of William Hill’s major shareholders, the board has decided that it will not pursue discussions with Amaya,” the UK company said in the statement. “Accordingly, the board has informed Amaya that it is withdrawing from discussions and wishes Amaya well for the future.”
Parvus Asset Management, an activist investor that owns more than 14 percent of William Hill, on Thursday last week said that the potential combination would destroy shareholder value.
The transaction would have created the largest global online gaming business, Deutsche Bank analyst James Wheatcroft said.
William Hill and Amaya on Monday last week said that they were discussing a potential merger of equals.
The UK firm recently staved off a takeover by smaller rivals 888 Holdings PLC and Rank Group PLC, and is seeking a new chief after ousting James Henderson. Amaya has faced the possibility of being taken private by former chief executive officer David Baazov.
Amaya became the world’s biggest online gambling company when it bought poker sites PokerStars and Full Tilt for US$4.9 billion in 2014. Since then, it has faced the ups and downs of changing regulation in the US and the encroaching uncertainty of an insider trading probe.
Baazov stepped down this year amid the investigation and pledged to try to take the company private himself. In February, Amaya said it had received a non-binding indication from its former boss that he was in discussions with investors to make an offer for the company valued at about C$2.8 billion (US$2.14 billion), or C$21 a share.
About US$14 billion has been splurged on betting-company takeovers in the past two years, according to data compiled by Bloomberg, more than in the previous three years combined.
Business has continued to be positive in the second half of the year, with work focused on improving online performance across mobile gaming, William Hill said.
The company continues to expect operating profit for this year to be at the top end of the previously guided range of ￡260 million to ￡280 million (US$318.25 million to US$342.69 million).
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