The U.K.'s William Hill and Canada’s Amaya are arguing that "combining the two troubled gambling companies could prove a perfect match," according Murad Ahmed of the FINANCIAL TIMES. William Hill is one of the U.K.’s largest retail bookmakers by number of shops, but is "being squeezed by competition from online competitors and new taxes." Amaya runs Pokerstars, but has "struggled to grow its sports betting arm and thereby diversify the company." Each has been "seeking a major deal for months." The two companies are in talks about a £4.6B ($5.7B) all-share "merger of equals." The companies said, "The potential merger would be consistent with the strategic objectives of both William Hill and Amaya and would create a clear international leader across online sports betting, poker and casino." Industry insiders with knowledge of William Hill and Amaya "are shocked the pair are considering a marriage." A senior exec at a competitor said, "Two wrongs don’t make a right" (FT, 10/9). In London, Jillian Ambrose reported the planned tie-up was "under discussion even before 888 and Rank approached the British gambling company with their audacious bid earlier this year." The merger talks between the pair "come just weeks after the FTSE 250 company rejected a three-way takeover deal from Rank and 888." William Hill said that the Amaya merger "fits with its diversification strategy by growing its digital and international businesses." Amaya’s "strong online offering could help to revive Hill’s fortunes in this area while Hill offers a strong foothold in the sports betting market" (TELEGRAPH, 10/9). BLOOMBERG's Paul Jarvis reported William Hill shares "surged in London" after the U.K. bookmaker said it is in talks with Amaya. The stock rose as much as 6.5% to 313.6 pence, boosting the company’s market value to £2.7B ($3.3B). Amaya gained 8.2% on Friday "after Reuters reported that the company had received interest from parties including William Hill." Deutsche Bank analyst James Wheatcroft said that the transaction "would create the largest global online gaming business." He added that "we think the deal could lead to significant cost savings," estimated at about £100M ($124M) (BLOOMBERG, 10/10).
