Bookmaker William Hill is raising funds with a new ordinary share placement for 19.99% of its existing share capital as it looks to capitalise on its position in the US sports betting market.
In a largely positive trading update, the firm said US sports staking benefited significantly from the availability of alternative sports and the resumption of UFC and NASCAR in May.
Although many casinos remained closed, William Hill operated drive-through sportsbooks in Nevada, a state where customers must sign up in person to use the William Hill app. It said this initiative proved popular and generated ‘considerable re-engagement’ online.
The company also revealed that it remains on track to launch online gaming in New Jersey upon receipt of regulatory approval.
CEO Ulrik Bengtsson was upbeat about the company’s performance over the past six weeks: “The return of sporting events has driven a strong recovery in our online volumes. Our UK Online business is in a better place than ever and our international business is displaying solid growth.
“In the US we have used this period of lockdown wisely to move our product forward and we are now in a strong position to capitalise on the US growth opportunity that lies ahead.”
Building on that positive drive, the firm has activated an ‘accelerated bookbuild’ to raise working capital for ‘its long-term growth ambitions, to strengthen its balance sheet and increase its strategic and financial flexibility.’ The global operator stated that funds will help accelerate its ‘digital momentum’ amid an expected drop in its retail footprint.
William Hill said that the US represents a large and profitable market opportunity, with an estimated market size of c.$7.5bn by 2025, and the firm has already achieved material scale with a 24% national market share, over half of which is digital.
It added: “Through the Eldorado and CBS commercial tie ups we have secured our position as a major operator as the market continues to open. We look forward to the completion of the acquisition of Caesars by Eldorado and preparations are well underway to bring the operation of the existing Caesars sports books into the William Hill network.”
William Hill underlined the fact that it has been operating in the US for nine years and has a strong management team with a deep understanding of the opportunity and evolving regulatory landscape. “We also have significant experience in running our own sports trading platform, giving us strong understanding of customer behaviour, acquisition costs and margins. Our history in Nevada of 24% CAGR over the last eight years with an operating margin of more than 30% in 2019 is testament to our expertise.
“We expect the number of states licencing sports betting in the US to increase over the next 12-18 months. We will continue to build on our national leadership position with the further roll out of our new proprietary platform, in which we continued investment during this time, and which now offers a compelling user experience with efficient adaptation to the unique requirements of each new state, enabling faster and lower cost market entry. These enhanced technology solutions will provide the US business with the strongest foundations for continued success.
“To do this, we will increase investment behind product, technology, new state start-ups and marketing. This is a crucial and exciting phase for us in the US, and the proceeds from the Placing will give us the flexibility to support and accelerate our roll-out strategy as opportunities emerge.”
For the new placing, William Hill has appointed Barclays Plc and Citigroup to act as joint-bookrunners facilitating the transaction for institutional investors, which the company aims to execute on Friday 19 June 2020.
Backing the directive, William Hill said that its executive team members will subscribe to the new share placement at its ‘placing price’ of 10p each per capital share of the company, contributing approximately ‘£200,000 in aggregate’.
The corporate filing also confirmed that William Hill will open its bookbuild to retail investors, who will be allowed to participate in the transaction through the LSE PrimaryBid platform.
