Amaya, William Hill End Merger Talks

Last week, Amaya and William Hill dominated the gaming news with their merger talks. But already, a potential merger between the two companies is dead.

The main reason why appears to be one of William Hill’s leading investors opposing the merger with Amaya.

As reported by Reuters, Parvus Asset Management is the investor in question, and they were thrilled when merger talks died.

“We’re pleased that the board has decided to cancel the talks with Amaya, and, from our perspective, we’re looking forward to working constructively with the board with regard to creating shareholder value for William Hill owners,” said Parvus co-founder Mads Gensmann.

While Parvus may be happy that the deal is over, it’s unclear if this is in William Hill’s best interests. European rivals Ladbrokes and Gala Coral merged last year, while Paddy Power and Betfair did the same just recently.

Betting companies have seen their profits dwindle in recent years, amid heavier regulation and high taxes. Betting exchanges face another challenge in adapting to meet the needs of younger, tech-savvy gamblers who bet from mobile devices.

William Hill is especially having trouble adapting after seeing long-time CEO Ralph Topping leave the company in 2014. His successor, James Henderson, was ousted in July after the board was unimpressed with his lack of expansion in online and international markets.

Many within the company were hoping that a merger could right the ship. But after a less-than-pleasing takeover bid from 888 and Rank Group, and failed talks with Amaya, William Hill finds themselves isolated in their efforts to improve.

The English bookmaker also offered £720 million ($895m) for 888 last year, but was rejected.

Without a major company to buy or merge with, William Hill stated this morning that they’ll be focusing on their online product, international markets, and technology.

A statement read that William Hill will “continue to consider strategic alternatives where they have the potential to create shareholder value.”

The company also stated that the second half of 2016 has gone well for them, and they expect to earn an operating profit of £260 million to £280 million on the year.

As for Amaya, former CEO David Baazov expressed interest in buying the company and taking it private, but a formal bid has never come.

GVC Holdings has also shown interest in buying Amaya, but this matter hasn’t gone anywhere either.

Amaya reports that they expect to make between $1.13 billion and $1.16 billion on the year, which is slightly lower than their average forecast of $1.17 billion.