Skip to main content

U.K. gaming group William Hill (WIMHY) is taking a punt on Canada's Amaya (AYA) as a merger partner just two months after seeing off a £3.2 billion ($4 billion) bid from one-time target 888 Holdings teamed with Rank Group.

William Hill and the Toronto and Nasdaq-listed owner of PokerStars said they are in talks "regarding a potential all share merger of equals." They said it would take place through a reverse takeover.

"Over recent months, the board of William Hill has been evaluating options to accelerate William Hill's strategy of increasing diversification by growing its digital and international businesses. Amaya has been undertaking a review of its strategic alternatives since February 2016," 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."

Amaya has been reviewing its options since founder and then-CEO David Baazov in February made an unsolicited offer to buy the company for C$2.8 billion ($2.1 billion).

In August, Baazov resigned as CEO on a temporary basis to fight charges of insider trading related to the company's 2014 purchase of PokerStars and Full Tilt Poker owner Oldford Group Ltd. for $4.9 billion.

TheStreet Recommends

William Hill, of London, has been without a permanent CEO since James Henderson was in July removed from the helm following profit warnings in March and October. The talks with Amaya come as William Hill is about to lose the No. 1 spot in the ranking of British betting shop operators when Ladbrokes completes its £2.3 billion merger with the betting shops of Gala Coral Group sometime this fall.

Consolidation in the betting and gaming industry has been rife in recent years, driven by higher taxes, increased regulation and the need for traditional British operators of "high street" betting stores to cut costs and expand their digital proposition. Last year, Paddy Power and Betfair combined in a $9.4 billion deal to create Paddy Power Betfair. 

Many more combinations have fallen through, including William Hill's bid to take over 888 in February last year, and 888's attempt just over a year ago to buy Digital Entertainment, in which it lost out to a £1.1 billion offer from GVC Holdings.

William Hill shares were recently up 3.2% at 304.30 pence in London. Amaya shares had closed up 8.2% at C$23.21 in Toronto on Friday.

The two companies have market values of £2.6 billion and C$4.1 billion, respectively.