888 Holdings Rejected Playtech Takeover Bid Earlier in 2023, Reports Say
Earlier in 2023, Playtech, a leading global online gambling tech supplier, reportedly expressed strong interest in acquiring British bookmaker William Hill’s parent company, 888 Holdings.
The Gibraltar-based 888 also owns 888 Poker and offers sports betting in Colorado, Michigan, and Virginia through its sportsbook collaboration with veteran American media brand Sports Illustrated.
The interest from Playtech culminated in July with a reported offer of $890 million. However, this initial approach was deemed to undervalue 888, leading to its rejection.
News of the offer was only broken this week by British newspaper The Times. However, in the intervening time, 888’s share price has
News of the offer was only broken this week by British newspaper The Times. However, in the intervening time, 888’s share price has substantially collapsed. The company is now only valued by the market at $381 million, far less than half of what Playtech offered just six months ago.
888 was an early investor in the U.S. gambling market, but has barely expanded outside of the first three states it launched in. It currently offers online casinos in New Jersey and Delaware, as well as online poker in Nevada.
Meanwhile, fellow European operator Playtech has been busily expanding across the U.S. in recent years. Just this week, it announced it the opening of its third live dealer casino streaming studio in the U.S, this one in Pennsylvania. It also provides online casino games and sports betting tech to various U.S. operators.
888 Holdings Predicted Loss
888 Holdings acquired the non-U.S. operations of William Hill from Caesars Entertainment in July 2022 for approximately $2.5 billion. However, that veteran British bookmaker was swiftly slapped with a $30 million fine by the UK’s Gambling Commission, which saw reputational damage hit revenues.
To add to that, it has experienced a challenging period with its U.S. investments, particularly in its Sports Illustrated Sportsbook venture. Although its online casino operations have done relatively well, legalization in new states has slowed somewhat in the last two years.
This situation with its U.S investments has prompted 888 Holdings, now led by new CEO Per Widerström, to embark on a several months-long strategic review. The aim is to conduct a comprehensive assessment of its overall online performance.
“Expect ongoing significant impact from compliance changes,” 888 Holdings chair Jon Mendelsohn told investors earlier this year. He went on to suggest that the company could lose 10% of its value by the end of 2023.
Past and Future Deals
Playtech’s proposed acquisition of 888 was part of a broader strategy to tap into the value and potential of William Hill, especially through integration with Playtech’s SNAI Italia business.
This move indicated Playtech’s ambition to expand its footprint in the European gaming market, where William Hill is a key player with a significant retail and digital presence.
Despite the rejection of the offer, Playtech and 888 will continue to work together on their collaborations in the U.S. market, including online casinos in Delaware and New Jersey.
888 also rejected an offer from leading U.S. sportsbook DraftKings over the summer, marking a busy period for the operator. The Boston-based giant operator DraftKings’ interest reportedly cooled on a takeover offer after it emerged that a group led by former Entain CEO Kenny Alexander had bought 6% of 888 Holdings.
That may have been a shrewd decision from DraftKings. Just months later, Alexander, CEO of Entain when it was known as GVC Holdings, was implicated in the corruption scandal over GVC’s past operations in Turkey.
That led to a huge $739 million fine for Entain from the UK taxman, Her Majesty’s Revenue and Customs, and criminal investigations remain ongoing.
Following the rejection of Playtech’s offer, 888 Holdings continues to operate independently amidst market uncertainties. The company’s decision to go it alone, even after multiple offers of a takeover, reflects confidence in its future prospects despite these concerns.