The serious changes are coming in both UK and US betting markets as William Hill accepted the Caesars Palace owner's buy-out bid. The coronavirus-caused lockdown facilitated the online betting market and raised shares volume for major market players, but Caesar's and William Hill's merger led to some market alertness. Our online magazine continues following the latest news in finance and outlines the most notable aspects to pay attention to.
One of the biggest financial deals during this week became the acquisition of William Hill by Caesars Entertainment. According to the reports, the American gambling venue owner has to pay about £2.9B (or $3.7 billion) for one of the most popular betting platforms in the UK. Since the beginning of the year, the British-based bookmaker's stock prices have risen by about 40%, which means the approximate market value of 3.1 billion pounds. Other major betting firms in Great Britain have also shown an increase in shares' price in 2020.
Even though the deal should be closed only in the second half of the next year, the merger of two gambling giants caused the downfall of the UK's bookmakers. Thus, Flutter Entertainment, which holds Paddy Power, became 1.5% less valuable than a few days ago. At the same time, GVC-owning Ladbroker shares dropped by 4%.
That is surely the market's reaction to the merger of two big groups, which have already cooperated. William Hill is ruling sports betting in the American casinos owned by Caesars Entertainment, having 80% of the joint venues, while the rest 20% belong to the recent buyer.
Why did Caesar's cooperation with William Hill cause the decline of others' shares?
Experts consider this joining step as the desire to facilitate the influence on the US bookmaking market. According to the forecasts, about a $30-35 billion market is at stake, and Caesars Entertainment is going to earn about $650 million in the following year. Traditionally, massive market players' merger strengthens their possibilities, while the competitors feel bigger pressure and stock prices' downfall.
Read more: Why are gambling stocks in high demand now?