William Hill ups the ante in OpenBet bid but Playtech still in pole position

16th February 2016 10:39 am GMT
Playtech is still the most likely candidate to acquire OpenBet despite William Hill looking to push ahead of its software supplier by pairing up with NYX Gaming Group for a joint bid to take charge of the business.The race to acquire the gaming software supplier from its private equity owners Vitruvian Partners is heating up with William Hill and Playtech emerging as the two most likely buyers. OpenBet’s owners are thought to be looking for around £175m for the company – though an asking price of up to £300m has been suggested – with the price complicated by the supplier’s debt. According to financial filings by OpenBet’s parent company, OB Topco Limited, the company had total net debt of £281.5m and paid £30.99m in interest and similar charges in its financial year ended June 30th 2015. With William Hill's annual report revealing net debt of £603m for its financial year ended December 31st 2014, the company would risk significantly increasing its debt through the acquisition, prompting it to partner NYX Gaming Group. Sources close to the deal have told Gaming Intelligence that this will see the operator provide NYX with the financing to complete the deal. This negates a lot of the risk the company would otherwise take on, as well as giving it control of its sportsbook after the apparent failure of its Project Trafalgar initiative, which has claimed two of its leading online employees, chief executive Andrew Lee and chief technology officer Finbarr Joy.However, this approach is not certain to succeed. NYX is already a close partner of PokerStars owner Amaya, William Hill’s increasingly powerful rival which is moving into new verticals such as sports betting and casino.Gaming Intelligence understands that William Hill also has a second bid in play to acquire OpenBet outright. This would most likely see it lose a number of clients who may be allowed to buy their way out of their contracts, but offers William Hill a number of new lottery and former gambling monopoly clients which it can target with its lottery focused Neogames business. Playtech, on the other hand, seems to have a clearer route. Its acquisitions of AvaTrade and Plus500 may have failed, but that leaves the solutions giant with the capital to manage OpenBet’s debt and see a faster return on investment by retaining more clients. It would also be able to set new prices and terms for supply deals, especially with a number of major contracts set to be renewed in 2016. Playtech also already supplies the majority of OpenBet’s major partners, and would simply be strengthening these relationships. Considering its close relationships with Ladbrokes and Gala Coral, it seems unlikely that the merged entity in particular would be aggrieved by the deal. A wide array of industry experts argue that Playtech remains the clear frontrunner to acquire OpenBet, and that William Hill’s involvement suggests the company is desperately looking to strengthen its position in the wake of major industry consolidation, with close rivals merging into newer, stronger entities. Whichever company misses out on OpenBet, they will have the opportunity to turn their attention to two other increasingly impressive sportsbook suppliers. SBTech, under newly-appointed chief executive Richard Carter, is pursuing a sale or stock market listing while Amelco, with clients such as PokerStars and mybet, is emerging as another big player in the sports betting market.rhm@gamingintelligence.com
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