William Hill and Amaya abandon £4.6bn mega-merger after shareholder revolt

'After canvassing views from a number of major shareholders, the board has decided that it will not pursue discussions'

The mega-merger is off (PA)

William Hill and Canada’s Amaya, owner of Poker Stars, ended merger discussions, squelching one of the biggest possible deals in the betting industry, after the UK bookmaker’s largest shareholder voiced opposition to the move.

William Hill will continue to consider strategic alternatives where they have the potential to create shareholder value, the London-based company said on Tuesday. The company will restart share buybacks, which it suspended in July, it said.

In a separate statement, Amaya said its board concluded that remaining an independent publicly traded corporation best positions it to deliver long-term shareholder value.

“After canvassing views from a number of William Hill’s major shareholders, the board has decided that it will not pursue discussions with Amaya,” the UK company said in the statement. “Accordingly, the board has informed Amaya that it is withdrawing from discussions and wishes Amaya well for the future.”

Parvus Asset Management, a London-based activist investor that owns more than 14 per cent of William Hill, said last week that the potential combination would destroy shareholder value. The transaction would have created the largest global online gaming business, according to James Wheatcroft, an analyst at Deutsche Bank.

William Hill and Amaya had said they were discussing a potential merger of equals. The UK company recently staved off a takeover by smaller rivals 888 Holdings and Rank Group, and is seeking a new chief after ousting James Henderson. Amaya has faced the possibility of being taken private by former chief executive David Baazov.

Amaya became the world’s biggest online gambling company when it bought poker sites PokerStars and Full Tilt for $4.9bn (£4bn) in 2014. Since then, it has faced the ups and downs of changing regulation in the US and the encroaching uncertainty of an insider trading probe.

Baazov stepped down this year amid the investigation and pledged to try to take the company private himself. In February, Amaya said it had received a non-binding indication from its former boss that he was in discussions with investors to make an offer for the company valued at around C$2.8bn, or C$21 (£13.10) a share.

About $14bn (£11.4bn) has been splurged on betting-company takeovers in the past two years, more than in the previous three years combined.

Business has continued to be positive in the second half of the year, with work focused on improving online performance across mobile gaming, William Hill said. The company continues to expect operating profit for 2016 to be at the top end of the previously guided range of £260m to £280m.

Bloomberg