ONLINE gambling firm Sportingbet has rejected an initial “lowball” offer from William Hill and GVC Holdings to snap up the business for £350m in an opening salvo for a bidding war over the company.
William Hill and GVC, who are hoping to carve up Sportingbet’s regulated and unregulated operations if they take over the firm, wrote a letter to its board last week proposing a 52.5p per share offer structured as 45p cash and 7.5p in GVC shares, which was rejected.
The two firms, who first revealed their plans to the market on 19 September, have until 16 October to come back and make a formal offer.
William Hill wants to buy the online bookie’s regulated businesses in Australia, Spain and Denmark, with GVC, which bought the firm’s unregulated interests in Turkey last year, keen to acquire the rest of its unregulated business.
“William Hill and GVC knew it was a lowball offer, the Australian business alone is estimated at 50p,” a source familiar with the matter said last night.
Sportingbet, which reports results on Wednesday, is likely to attract further interest from other suitors including Paddy Power and Ladbrokes, with sources saying the firm is now “in play” for a takeover.
The firm’s shares closed up at 51.5p on Friday, despite analysts still targetting a price of 60p.
Peel Hunt analyst Nick Batram said: “Our view is that William Hill is likely to have first looked at Sportingbet when the price was much lower.
“While there is a compelling strategic rationale behind a possible acquisition of Sportingbet, there is also an element of opportunism.”
Batram added that an offer in the region of 60p cash from William Hill and 10p equity from GVC would be enough to clinch a deal.