William Hill, Amaya drop short-lived gambling merger talks
By Kate Holton and Simon Jessop
LONDON/TORONTO (Reuters) - William Hill (WMH.L: Quote) and Canadian online gambling company Amaya Inc (AYA.TO: Quote) AYA.O have abandoned merger talks, leaving the British bookmaker struggling to find a partner in a fast consolidating industry.
Amaya, operator of the PokerStars website, and William Hill, one of the best-known British gambling brands, said earlier this month they were in talks about a merger of equals but the deal was thrown into doubt days later when a leading investor in William Hill said it would oppose the plan.
The Canadian company said it had decided it could best deliver shareholder value by remaining an independent company, while William Hill said it decided to walk away after canvassing its biggest investors. Amaya shares tumbled 8.3 percent.
William Hill investor Parvus Asset Management, which came out against the Amaya deal last week, welcomed the news.
"We're pleased that the board has decided to cancel the talks with Amaya, and, from our perspective, we're looking forward to working constructively with the board with regard to creating shareholder value for William Hill owners," Parvus co-founder Mads Gensmann said.
William Hill is looking increasingly isolated after European rivals Paddy Power (PPB.I: Quote) and Betfair joined forces, while Ladbrokes LAD.L agreed to unite with unlisted Gala Coral.
Betting companies are facing tighter regulation and higher taxes in countries such as Britain and need to adapt to an environment in which younger and more tech-savvy gamblers are increasingly betting online or via smartphone.
Amaya, which had been evaluating strategic alternatives since earlier this year, said it has ended that process. It had also received interest from GVC Holdings (GVC.L: Quote) and private equity firms, sources have told Reuters. Continued...