There has been a lot of recent speculation about another potential major merger between two giants in the gambling industry – William Hill and Amaya. William Hill is a British company that hasn’t been doing so well as of late, while Amaya is a Canadian gambling company that has been on the rise after purchasing several other companies to add to its marketable collection. It has now been disclosed that these two companies have ended talks about a merger that would have resulted in a combined net worth in excess of £4.5 billion.
This decision was released by William Hill, who came to the conclusion as to not follow through with a merge following talks with some of the largest shareholders in the company that advised against it. This deal, intended as a “merger between equals”, received a lot of scrutiny from investors on the William Hill side.
Parvus Asset Management was perhaps the most vocal about their objection, and were most likely the largest influence behind the decision to end negotiations. This group owns the largest share in William Hill with a total of 14% of the company. They made it public that they were highly against the merge for a number of reasons, specifically pointing out the major debt owed by Amaya as well as the drop in share value for current shareholders in the company. They also noted that it didn’t make a lot of strategic sense to merge with Amaya and was only going to devalue their half of the company. William Hill responded by claiming that they needed to speak with other shareholders about their interest in the merge before making a decision, and it would appear that they were not met with much enthusiasm.
It would appear as if the decision was mutual on both sides. Amaya also released a statement on the issue, citing that their financial advisers did not think that it would be a good idea to follow through with the merger and that it would remain an independent company for the best interest of Amaya.
There seemed to be a disagreement about the value of online poker between Amaya and William Hill. William Hill believes that online poker is no longer a good source of revenue and that it is on the decline. Amaya cited back that this opinion is surrounded by misinformation and their online poker platforms are doing quite well with over 2.4 million active users each quarter. Amaya believes that online poker is still a very active form of gambling and it is not on the decline, and sources that site that it is are under reporting the data.
It doesn’t come as much of a surprise that the merger didn’t go through following certain disagreements on core issues and a lack of shareholder support. As of now, both William Hill and Amaya will be continuing to operate as independent companies without any further talks of merging.