- Caesars Sportsbook by William Hill will also become a sponsor of ESPN's Fantasy products, extending an existing relationship as ESPN's exclusive odds provider. Caesars Entertainment shares recently.
- William Hill’s Largest Shareholder Demands Sale of Gambling Company. Posted on: February 13, 2017, 06:00h. Last updated on: February 13, 2017, 05:06h.
Stock analysis for William Hill PLC (WMH:London) including stock price, stock chart, company news, key statistics, fundamentals and company profile.
The stock market has whipsawed investors lately, with up days often following down days, and vice versa. Market participants remain stymied by all the factors they have to consider right now, including the November elections, the coronavirus pandemic, the economic recession, and the ever-changing views on fiscal and monetary policy.
All of those issues are creating uncertainty, but investors set those concerns aside early Friday. Just before 11 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI) was up 70 points to 26,885. The S&P 500(SNPINDEX: ^GSPC) had gained 12 points to 3,259, and the Nasdaq Composite(NASDAQINDEX: ^IXIC) was higher by 91 points to 10.764.
Sports betting stocks found themselves in the spotlight on Friday. One company has become an acquisition target, and the potential for a bidding war has helped to send stocks across the industry higher. Below, we'll look more closely at whether now's the time to bet on sports betting's future.
William Hill gets interest
The immediate cause for investors to pay attention to sports betting stocks came from U.K. bookmaker William Hill (OTC: WIMHY). The company confirmed that it has gotten at least two written proposals concerning a possible takeover. Apollo Global Management (NYSE: APO) was the first to make its bid, coming toward the end of August. After that, William Hill got an updated proposal from Apollo as well as a separate offer from Caesars Palace operatorCaesars Entertainment (NASDAQ: CZR).
The three companies have histories that are intertwined. Apollo was part of the group of private equity players that participated in the late 2000s leveraged buyout of Harrah's, the predecessor name of Caesars Entertainment. Caesars and William Hill have already been partners on the online side, with suggestions that combining William Hill's U.S. operations with Caesars could create a big player in the gambling industry.
The fact that William Hill became a supplier of betting odds information for Disney's (NYSE: DIS) sports network ESPN was also a big win for the U.K. company. That made William Hill an even more attractive prize for investors.
Gains across the industry
The news about William Hill has the entire gambling sector doing well. Global giants Wynn Resorts and Las Vegas Sands were up only 1% to 2% Friday morning, but more U.S.-centric companies outperformed. MGM Resorts gained almost 3%, while Penn National Gaming, Boyd Gaming, and DraftKings all rose 4% to 6%. Horse racing venue Churchill Downs enjoyed even sharper gains of more than 9%.
Investors see a lot of tailwinds for the industry. Reopening markets in the U.S. looks like more of a certainty, because state governments have had their normal sources of tax revenue dry up as a result of the pandemic and massive unemployment; meanwhile, their expenses have risen to fight the coronavirus. Tapping online gambling as a new source of revenue is an obvious answer.
One M&A deal isn't necessarily going to change the landscape of sports betting across the industry. But it does highlight just how important the fast-growing niche has become. With stock investors always on the lookout for promising growth opportunities, what happens to William Hill could foreshadow a whole lot more activity in sports betting in the months and years to come.
Dan Caplinger owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Boyd Gaming and Churchill Downs and recommends the following options: long January 2021 $60 calls on Walt Disney and short October 2020 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.SPONSORED:
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William Hill Sports Betting Stock
In 1966, a wager on England winning the soccer World Cup helped the Done family finance the first outlet of one of the world’s largest closely held betting firms. This week, a side bet got them a cool $220 million.
That’s what Betfred Group founders Fred and Peter Done, who are worth about $1.5 billion, are set to pocket from their investment in rival William Hill Plc. The company accepted a 2.9-billion-pound ($3.7 billion) bid from Caesars Entertainment Inc. on Wednesday, capping off a month in which William Hill’s shares surged more than 50%.
Since March, the Done family has doubled its holdings in William Hill to 6%, via a company they control. The family first surfaced as significant William Hill shareholders in early 2020 and increased their stake on at least three occasions this year, filings show. One was disclosed on March 20, after markets tanked amid concerns over the coronavirus pandemic and sporting events -- the lifeblood of the gambling industry -- were canceled.
William Hill has rallied about 600% since then as the company continued its expansion into the U.S., where sports betting was legalized in 2018. It was also buoyed by takeover interest not only from Caesars Entertainment, but also from Apollo Global Management Inc.
A Betfred spokesman said Fred Done has purchased shares in William Hill for the past two years. He declined to comment further.
Caesars Entertainment’s all-cash offer, which needs approval from William Hill shareholders, will also make winners out of brokerage Hargreaves Lansdown Plc and Silchester International Investors, the discrete firm set up by former Morgan Stanley banker Stephen Butt.© Bloomberg Betting firm's shares have rallied about 600% since March 20
William Hill Gambling Stocks
Fred, 77, and Peter, 73, grew up in a poor area of England. As children, the siblings helped their father run a betting business before high-street gambling outlets were legalized in the U.K.
After setting up their own firm in the 1960s, they helped to attract clients away from established betting companies including William Hill by offering large cash bonuses. Betfred now has more than 1,300 outlets across the U.K. and Ireland and launched its own U.S. sports betting exchange last year.
Betfred and the brothers’ other investments have paid out dividends of more than 100 million pounds within the past five years, according to the Bloomberg Billionaires Index. Those holdings include an e-gaming business, a litigation-funding firm and business services company Peninsula, which Peter and Fred founded in 1983 to help small firms.
The Dones set up their own family office last year, joining a growing number of wealthy families establishing their own investment firms to manage their fortunes.
“I’m in many businesses now, but bookmaking is still my first love,” Fred Done said in an interview released by Betfred in 2017. “Fixing the odds -- I enjoy it.”
(Updates William Hill’s share increase since March 20 in fourth graph and chart.)
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