Been a while since I've written anything on industry developments, and was reminded of that on the weekend - so expect an industry update soon, but this was worthy of a post on its own.
UK betting giant William Hill is reported to being seriously considering taking over internet betting rival Sportingbet. The online specialists have long been seen as a potential acquisition target and haven't done much to scare rivals off. Hills aren't the only potential suitors though, they have a potential co-bidder in GVC.
William Hill considers joint takeover of Sportingbet
William Hill is considering a joint takeover of online rival Sportingbet that would see it cherry pick the Guernsey-based firm's lucrative Australian operations and possibly its business in Spain.
Sportingbet, shirt sponsors of Wolverhampton Wanderers football club, had last year been in lengthy takeover discussions with William Hill's closest competitor Ladbrokes. A deal could not be thrashed out, however, because of legal concerns about Sportingbet's activities in unregulated markets.
Traditional high street bookmakers are racing to expand their online businesses to keep pace with liberalising markets around the world and technologic advances that are transforming the range of products offered to sports betting punters.
Shares in Sportingbet, which have been rising in recent months, closed up 7.25p at 51p following an announcement from William Hill on Wednesday. This values the business at £330m.
Sportingbet's Australian business accounts for about half of the group's revenues and the lion's share of profits. Spain – a newly regulated online market – represents a further 14% of revenues. Other important territories include Greece, Germany and the UK.
It's a bizarre strategy from William Hill - they were serious pursuers of Centrebet not that long ago, but opted out because of issues with restricting Australian customers over issues with in-play betting regulations and their casino & poker products. Along came Sportingbet to buy Centrebet. Sportingbet have already managed conforming with Australian regulations as their antipodean operation runs relatively independently of the UK business... and then William Hill went and closed all Australian customer accounts anyway so they don't break any laws and risk their licence applications in Nevada.
Or is it a shrewd strategy? It might cost them a little bit more, but if someone else has done most of the due diligence work for them..... You may remember that Paddy Power took over IAS by default when they purchased Sportsbet a couple of years ago. Rumours of unrest in the Sportsbet office abound - the Irish beancounters have taken over, traders might as well be kids off the street with no idea, opinions are a thing of the past...