HG Vora acquires 5.1% stake in William Hill for $149 million, fueling sale speculations

HG Vora acquires 5.1% stake in William Hill for $149 million, fueling sale speculations

Activist hedge fund HG Vora Capital Management has reportedly acquired 5.1 per cent of William Hill in a deal valued at nearly $149 million, fueling speculation that the hedge fund could push for a sale of the British bookmaker.

New York-headquartered HG Vora has more than $7.5 billion in assets under management. Founded in the year of 2009 by Parag Vora, the activist hedge fund describes itself as concentrated on value and event-driven investments.

The deal fueled speculation that the firm could make a push for a sale of the British bookmaker William Hill. Speculations about William Hill’s sale, particularly sale of the firm’s rapidly growing US business, is not new. As sports betting business keeps on skyrocketing in the US, many analysts have said that investors do not adequately value the British bookmaker’s US footprint.
Considering the value of the latest deal, the British bookmaker is the largest sports betting services provider in this country. According to market experts, William Hill should be considered as a high-growth stock, a treatment that the stock is currently not receiving.

Some Wall Street analysts recently floated the idea of 50-50 partnership with NASDAQ-listed casino giant Caesars Entertainment. In that case, the companies would spin off 20 per cent of iGaming or sports betting business to public investors. Of the remaining 80 per cent, each operator will retain 40 per cent stake in the business.

Speaking on Caesars Entertainment is relevant in this case as for more than one reason. Even at the new version of the casino giant, the British bookmaker is responsible for running all Caesars sportsbooks across the nation. The purchaser of Caesars Entertainment, the old Eldorado Resorts, still owns 20 per cent stake in William Hill’s US operations.

HG Vora also owns a considerable stake in William Hill, which is acquired in 2018. Following the acquisition of the stake at the time, the hedge fund pushed the then-financially fragile sports betting firm to sell its business. The hedge fund still owned 1.5 million Caesars. However, it is still unclear if HG Vora will push William Hill to sell its stake to Caesars Entertainment or to some other buyer.

If HG Vora really pushes William Hill to sell its stake to Caesars Entertainment, then it would not be the first of its kind case. Previously in 2018, the hedge fund succeeded on the gaming consolidation front by paving the way for casino operator Penn National Gaming to acquire rival Pinnacle Entertainment in a deal valued at $2.8 billion.