William Hill chief blames divorce for £5m stake sale that knocks shares

Shares in William Hill crashed 3 per cent yesterday after its chief executive revealed he had cashed in the vast bulk of his stake in the bookmaker.

Shares in William Hill crashed 3 per cent yesterday after its chief executive revealed he had cashed in the vast bulk of his stake in the bookmaker.

David Harding raised £5.3m after he exercised options over almost 1 million shares. He was forced to sell the shares on Wednesday, at 555p each, to pay for a divorce settlement from his wife, Lucia.

The move unsettled investors, and shares in the group fell 18.5p to 540p. Paul Leyland, an analyst at Seymour Pierce, advised shareholders to "follow the leader" and sell. "Competition is increasing across all channels and should be increased on gambling reform. Finally, we believe entry into gaming will be difficult and highly expensive," Mr Leyland added.

Dealers said "buy" notes from ABN Amro and Citigroup provided a floor for the stock, preventing it from falling further. Citigroup lifted its price target on William Hill from 600p to 650p and argued that current consensus forecasts were too low.

Mr Harding, 49, who joined the group in 2000, still owns 50,000 shares, worth £270,000 at last night's closing price. He is still a member of performance-related schemes that could give him up to 937,000 shares.

A spokeswoman for the group said: "Mr Harding's decision was made for personal reasons. He is still very committed to the business."

The country's second biggest betting shop chain floated two years ago, joining the FTSE 100 earlier this year. The company has more than doubled in value since listing on the stock market, buoyed by the scrapping of betting tax and the introduction of lucrative fixed-odds betting terminals - souped-up slot machines that allow punters to bet on games such as roulette.

Divorce proceedings hit shares in French Connection last month after the fashion group's founder and chief executive, Stephen Marks, was forced to sell down his majority holding to raise cash for his settlement. Analysts expect William Hill to use the spare cash it generates to fund a share buy-back programme, while continuing to expand its estate where it can. In March, it said pre-tax profits had doubled last year to £171m.