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UK – William Hill confirms recommended cash offer for Mr Green

William Hill has confirmed it has made a recommended cash offer to buy Mr Green for £242.1m with the claim that earnings from the first full year of ownership will give returns above William Hill’s cost of capital.

MRG is a fast-growing, innovative iGaming group with operations in 13 markets and brands including Mr Green and Redbet. MRG holds remote gambling licences in Denmark, Italy, Latvia, Malta, Great Britain and Ireland, and expect to obtain licences in Sweden by year end. MRG has leading gaming and casino products supported by a fast growing sportsbook.

Philip Bowcock, William Hill PLC Chief Executive Officer, said: “This proposed acquisition accelerates the diversification of William Hill – immediately making us a more digital and more international business. MRG will provide William Hill with an international hub in Malta with market entry expertise and strong growth momentum in a number of European countries. William Hill will move from a single brand to a suite of brands that can maximise growth opportunities moving forward in new and existing markets.”

The Board of Directors of MRG has recommended the Offer for acceptance by the shareholders, and shareholders in MRG Henrik Bergquist, Hans Fajerson, Fredrik Sidfalk, Martin Trollborg, Karl Trollborg, Tommy Trollborg and Anita Trollborg representing in aggregate 40.04 per cent of the total number of issued shares and votes in MRG, have undertaken to accept the Offer and tender any of their shares in MRG in the Offer.

William Hill said that the ‘combination of William Hill and MRG will create a strongly positioned combined business with an expanded pan-European footprint in faster growing online betting and gaming markets, further supported by the existing William Hill Online and Retail businesses in the UK and the US.’

William Hill explained: “MRG’s existing international hub in Malta combined with operational expertise in establishing a presence in new markets will increase William Hill Online’s international footprint and growth potential. MRG’s online-only business will increase the Group’s share of online and international revenue and profits, and reduce William Hill’s exposure to the UK market. Based on HY2018, the Transaction increases the Group’s overall online revenues from 42 per cent to c.47 per cent (ex-WHUS) with the proportion of international revenues increasing from c.14 per cent to c.21 per cent. Based on Q3 2018 results, MRG’s geographic revenue mix was 40 per cent in Western Europe, 36 per cent in the Nordics, 21 per cent in Central, Eastern and Southern Europe and three per cent in other regions.”

MRG’s primary brands, Mr Green and Redbet, have demonstrated strength and are complementary to the William Hill brand and enable the Group to pursue a multi-brand strategy in territories where it is strategically beneficial to do so. MRG has historically delivered strong revenue growth across all the regions in which it operates.
Recent trading has continued to be robust with MRG revenue growth of 51 per cent in Q3 2018 vs Q3 2017 and 2018 YTD revenue growth of 44 per cent versus the same period in 2017. William Hill believes that the addition of an international hub in Malta and MRG’s operational expertise will further strengthen its growth potential.