William Hill Weighing Up Retail Sale; Debt Pile Could Cast Doubt

William Hill could sell off its retail estate, but there has been little movement on that front, according to reports. It is believed that a potential deal is still in the exploratory stage, but progress has been rather tentative.

For the past couple of months or so, there has been plenty of speculation about what Evoke, William Hill’s owners might do. There had been suggestions that William Hill could split up or sell key assets, but it is believed no final decision has been made.

What’s the holdup?

Naturally, any potential deal involving a major UK betting operator requires thorough scrutiny. Before Christmas, there were murmurs that William Hill could put up its entire retail empire, which includes over 1,000 shops across the UK, up for sale. However, things haven’t been so straightforward, and it has taken more time than originally anticipated.

At the time, banking giants Morgan Stanley and Rothschild were brought in to carry out a full strategic review of Evoke’s businesses. Evoke, which also owns 888Sport, 888poker and 888casino, has been trying to decide how best to move forward in light of the challenging climate for the betting industry.

A statement originally put out by Evoke originally said:

“The board of directors of the company confirms it has decided to undertake a review of the company’s strategic options, which will include the consideration of range of potential alternatives to maximise shareholder value, including, but not limited to a potential sale of the group, or some of the company’s assets and/or business units.”

Who is in the picture to acquire William Hill?

Mergers and Acquisitions (M&A) aren’t always so smooth, especially in highly competitive arenas such as the gambling industry. At the moment, it is suggested that only William Hill’s retail business could be impacted, while the online arm will continue as normal.

Nevertheless, there are a couple of potential suitors that could throw their hats into the ring. Bally’s, for example, is supposedly hatching market share gains in the UK via M&A. Meanwhile, Betfred, which is also one of the UK’s biggest betting sites, is an experienced hand, and they supposedly know the costs entailed.

It is believed that by acquiring some of Evoke’s assets, it could set them back as much as £30 million. However, it is purported that ripping up the retail arm could devalue the online business.

Potential hurdles to clear

Inevitably, acquiring a betting operator like William Hill means there are potential hurdles to clear. The most glaring one perhaps is the £2 billion debt pile that they have accrued.

The pile dates back three years, and is linked to Caesars Entertainment’s purchase of William Hill’s non-US assets in 2022. When discussing the challenge facing William Hill, an unnamed source said:

“The big challenge [for Evoke] is that retail is actually quite cash generative. So, unless they got a very premium multiple, you’re actually not doing much in terms of your ability to service your debt.

“I would have thought selling retail on its own, unless it’s at a very attractive multiple, is going to be difficult [for Evoke].”

UK budget fallout continues

Although Evoke’s share price has been steadily climbing over the past few weeks, the fallout from the UK budget announcement shows no signs of slowing down.

While there has been some scaremongering about how betting operators will be able to cope, those associated with William Hill will be hoping for a resolution soon.