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William Hill stumbles on reports of failed Caesars Entertainment takeover bid

City analysts suggest that news of the cancelled deal could have been leaked to put the bookmaker in play and bring other buyers out of the shadows
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William Hill and the Caesars Palace casino owner reportedly failed to agree on a takeover price

William Hill PLC (LON:WMH) shares briefly bounced off their all-time low on Monday after reports that the bookmaker has held merger talks with Caesars Entertainment Corporation (NASDAQ:CZR).

Negotiations were held last summer with the US casino group about a potential £3bn takeover by Caesars for a combination of cash and shares, the Sunday Times reported.

READ: William Hill says full-year outlook in line with expectations

However, by August the FTSE 250 bookie and the Caesars Palace casino and hotel owner had failed to come to an agreement over the takeover price and the talks were nixed.

William Hill’s valuation has since slumped to just under £1.2bn, not helped by a huge write-down of its UK betting shops, as its shares have more than halved from just under 300p at the start of August to finish last week at just over 134p.

Under chief executive Philip Bowcock, Willian Hill fought off takeover bids from rivals Rank and 888 in 2016, before an ambitious attempt to merge with Canada’s Amaya failed.

READ: William Hill falls to huge loss as it writes down value of UK retail business by £900mln

Caesars, which is valued at almost $5.9bn on Wall Street, has been put under pressure to pursue deals by activist investor Carl Icahn, amid falling sales in Las Vegas last year.

In March, newswires reported that Caesars was in talks with Eldorado Resorts Inc (NASDAQ:ERI) about a possible merger.

City analysts contended that news of the aborted William Hill talks could have been leaked to put the bookmaker in play and bring other buyers out of the shadows, with the Telegraph quoting one suggestion that an enlarged Eldorado-Caesars could take the “logical next step” of snapping up the UK outfit for its expertise in online gambling.

William Hill shares spiked as high as 140p on Monday morning but were soon back in the red, down almost 2% to 131.45p.

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