Casino giant Caesars Entertainment has confirmed it is in “advanced discussions” over a £2.9bn takeover of William Hill.
The announcement comes after William Hill said on Friday that it had received approaches from Caesars as well as private equity firm Apollo.
William Hill’s board of directors has now told Caesars that its offer “is at a price level that they would be minded to recommend” to shareholders, the US casino firm said.
Image: Caesars is a US casino giant
Shares in the UK bookmaker had surged on Friday as details of possible bids emerged, taking its value to just under £3.3bn.
The Caesars cash offer of 272p per share falls short of the 312p where the stock closed last week but is still 25% higher than the price at which they finished trading on Thursday.
Details of the Caesars offer on Monday prompted a 13% fall in the stock price.
Caesars said it has completed due diligence checks on the deal and expects if agreed that it will complete in the second half of 2021 – subject to approval by shareholders and regulators.
The US company already owns a 20% stake in William Hill’s US operations – a business which has exclusive rights to operate sports betting under the Caesars brand.
Caesars chief executive Tom Reeg said: “The opportunity to combine our land-based casinos, sports betting and online gaming in the US is a truly exciting prospect.
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“William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to better serve our customers in the fast growing US sports betting and online market.
“We look forward to working with William Hill to support future growth in the US by providing our customers with a superior and comprehensive experience across all areas of gaming, sports betting, and entertainment.”
William Hill’s earnings from its traditional bookmaking business have been squeezed in recent months as the pandemic closed high street stores as well as curtailing sporting fixtures.
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It has also been under pressure due to regulations cracking down on fixed-odds betting terminals at its shops, which it blamed for announcing 700 site closures last year.
Last month it said it was closing 119 more shops.
The company, founded in 1934, has been shifting focus towards online betting and expanding its US operations.