And they're off! With Punch due to float tomorrow, William Hill announces £1bn IPO

Click to follow
The Independent Online

William Hill is pressing ahead with plans to raise £350m from a stock market listing that will value Britain's second-biggest bookmaker at about £1bn.

The group, which is poised to benefit from sweeping changes to Britain's gaming laws, is timing its flotation for the middle of June to capitalise on the betting frenzy that will surround the Football World Cup. In addition to the marketing benefits, UK bookmakers are expected to make about £250m from the event.

"Now's the time to list. We have a good, solid track record of recycling profits after the [recent betting] tax change and have proved that our internet business is profitable," said David Harding, the chief executive.

Mr Harding, who will net up to £4.5m in cash and shares from the float, said the proceeds from listing would be used to pay down debt and give the group scope to target acquisitions. He sees scope to increase the group's estate of 1,500 shops by "easily another 300 to 400".

While he ruled out acquiring rival Coral Eurobet outright on competition grounds, he said he would be interested in a parcel of Coral's shops if the group was broken up in a trade sale.

Analysts dismissed concerns that last week's disappointing market debut by the music retailer HMV had shaken the market for new issues. One leisure analyst said: "The market is short of investment vehicles in gaming and William Hill offers a strong brand name."

The group, which will have an enterprise value of between £1.4bn and £1.6bn including £520m of debt, said the shares would yield between 3.5 and 4 per cent. Unlike Punch Taverns, the pubs group that will see its shares start trading later this week, William Hill's offer is available to retail investors as well as institutional investors.

Cinven and CVC, William Hill's private equity owners, are expected to sell down their 90 per cent stake to about 30 per cent while the group's management is expected to decrease its stake from 10 per cent to about 4 per cent.

Neither Mr Harding nor Tom Singer, the finance director, currently hold any shares although Mr Harding will receive £1m in shares as part of a flotation bonus and will be in line for up to a further £2.5m in shares as part of a four-year performance-related package.

Comments