William Hill announces a recommended public cash offer to the shareholders of Mr Green & Co

The Offer is not being made, and this press release may not be distributed, directly or indirectly, in or into, nor will any tender of shares be accepted from or on behalf of holders in, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States or any other jurisdiction in which the making of the Offer, the distribution of this press release or the acceptance of any tender of shares would contravene applicable laws or regulations or require further offer documents, filings or other measures in addition to those required under Swedish law.

William Hill announces a recommended public cash offer to the shareholders of Mr Green & Co

William Hill PLC (“William Hill”), through a controlled affiliate William Hill Holdings Limited, (“William Hill Holdings”), hereby announces a recommended public cash offer (the “Offer”) to the shareholders of Mr Green & Co AB (publ) (“MRG” or the “Company”), to tender all their shares to William Hill. The shares in MRG are admitted to trading on Nasdaq Stockholm, Mid Cap (“Nasdaq Stockholm”).

Summary of the Offer

  • William Hill offers SEK 69 in cash per share in MRG. The total offer value for all shares in MRG amounts to approximately SEK 2,819 million.(1) 
  • The Offer represents a premium of:
  • 48.5 per cent compared to the closing price of SEK 46.5 of the Company’s share on Nasdaq Stockholm on 30 October 2018, the last trading day before the announcement of the Offer;
  • 61.7 per cent compared to the volume-weighted average share price of SEK 42.7 of the Company’s share on Nasdaq Stockholm during the last 30 days prior to 30 October 2018; and
  • 63.4 per cent compared to the volume-weighted average share price of SEK 42.2 of the Company’s share on Nasdaq Stockholm during the last 90 days prior to 30 October 2018.
  • The board of directors of MRG(2) recommends the Offer for acceptance by the shareholders of MRG.
  • Shareholders in MRG representing in aggregate 40.04 per cent of the shares and votes in MRG, have undertaken to accept the Offer and tender all of their shares in MRG in the Offer, subject to certain conditions.
  • Neither William Hill, William Hill Holdings nor any closely related companies or closely related parties currently holds or controls any shares or any other financial instruments in MRG.
  • An offer document regarding the Offer is expected to be published at the beginning of December 2018. The acceptance period for the Offer is expected to commence around 10 December 2018 and end around 11 January 2019. Settlement is expected to begin around 17 January 2019. The indicative timetable for the Offer has been set to reflect the review periods of the relevant competition authorities, the completion of which is expected to occur in the beginning of January 2019.

Commenting on the Offer, Philip Bowcock, William Hill PLC Chief Executive Officer, said: "This proposed acquisition accelerates the diversification of William Hill - immediately making us a more digital and more international business. MRG will provide William Hill with an international hub in Malta with market entry expertise and strong growth momentum in a number of European countries. William Hill will move from a single brand to a suite of brands that can maximise growth opportunities moving forward in new and existing markets."

Background and reasons for the Offer

MRG is a fast-growing, innovative iGaming group with operations in 13 markets and brands including Mr Green and Redbet. MRG holds remote gambling licences in Denmark, Italy, Latvia, Malta, Great Britain and Ireland and expects to obtain Swedish licences by year end. MRG has leading gaming and casino products supported by a fast growing sportsbook.

 

Strategic Rationale

The combination of William Hill and MRG will create a strongly positioned combined business with an expanded pan-European footprint in faster growing online betting and gaming markets, further supported by the existing William Hill Online and Retail businesses in the UK and the US.

 

MRG has a number of core attributes that will enhance the William Hill business and strategy:

  • International growth: MRG’s existing international hub in Malta combined with operational expertise in establishing a presence in new markets, will accelerate William Hill Online’s international footprint and growth potential;
  • Improvement to William Hill revenue mix: MRG’s online-only business will increase the Group's share of revenue and profits from online as well as from outside the UK, and reduce William Hill’s exposure to the UK market. Based on the first six months 2018, the transaction increases the Group’s overall online revenues from c.42% to c.47% (ex-WHUS) with the proportion of revenues from outside the UK increasing from c.14% to c.21%. Based on Q3 2018 results, MRG’s geographic revenue mix was 40% in Western Europe, 36% in the Nordics, 21% in Central, Eastern and Southern Europe and 3% in other regions;
  • Brand: MRG’s primary brands, such as Mr Green and Redbet, have demonstrated strength and are complementary to the William Hill brand and enable the Group to pursue a multi-brand strategy in territories where it is strategically beneficial to do so;
  • High growth potential: MRG has historically delivered strong revenue growth across all the regions in which it operates (FY15-17: 23% CAGR), underpinned by resilient organic growth. Recent trading has continued to be robust with MRG revenue growth of 51% in Q3 2018 versus Q3 2017 and 2018 YTD revenue growth of 44% versus the same period in 2017. The addition of an international hub in Malta and MRG’s operational expertise will further strengthen William Hill’s growth potential; and
  • Leadership in sustainability: Strong fit between MRG’s leadership position on sustainability and William Hill’s Nobody Harmed ambition.

 The transaction implies:

  • Growth acquisition which strengthens William Hill’s international business and drives further online penetration;
  • Access to an international hub from which to drive international growth together with deeper operational expertise in new markets; and
  • Brings strong brands with track record of growth across its geographic portfolio.

Ulrik Bengtsson, William Hill’s Chief Digital Officer, will be responsible for leading the integration of MRG within the Group and has a strong background in working with Nordic online gaming businesses through his time at Betsson.

The Offer

William Hill offers SEK 69 in cash per share in MRG. The total offer value for all shares in MRG amounts to approximately SEK 2,819 million.(3) No commission will be charged in connection with the Offer.

The Offer represents a premium of: 

  • 48.5 per cent compared to the closing price of SEK 46.5 of the Company’s share on Nasdaq Stockholm on 30 October 2018, the last trading day before the announcement of the Offer;
  • 61.7 per cent compared to the volume-weighted average share price of SEK 42.7 of the Company’s share on Nasdaq Stockholm during the last 30 days prior to 30 October 2018; and
  • 63.4 per cent compared to the volume-weighted average share price of SEK 42.2 of the Company’s share on Nasdaq Stockholm during the last 90 days prior to 30 October 2018.

 The acceptance period for the Offer is expected to commence around 10 December 2018 and end around 11 January 2019. Settlement is expected to begin around 17 January 2019. The indicative timetable for the Offer has been set to reflect the review periods of the relevant competition authorities, the completion of which is expected to occur in the beginning of January 2019. If all relevant competition authorities have reviewed the Offer and the acquisition of MRG or if William Hill waives condition (3) below, in such time that the acceptance period can be closed before 11 January 2019, William Hill may announce a new end date of the acceptance period, subject to that such announcement can be made not less than two weeks prior to the new end of the acceptance period.

Recommendation from the board of directors of MRG

The board of directors of MRG(4) has recommended the Offer for acceptance by the shareholders in MRG. The statement by the board of directors will be announced by MRG today in a separate press release, and will be included in its entirety in the offer document that will be prepared and published by William Hill.

William Hill’s and William Hill Holdings’ shareholding in MRG

Neither William Hill, William Hill Holdings nor any closely related companies or closely related parties currently holds or controls any shares or any other financial instruments in MRG.

Neither William Hill, William Hill Holdings nor any closely related companies or closely related parties has acquired or agreed to acquire any shares in MRG, or any other financial instruments that give a financial exposure equivalent to a shareholding in MRG, during the six month-period preceding the announcement of the Offer, other than entering into such undertakings as set out in section “Undertakings by shareholders” below.

Undertakings by shareholders

Shareholders in MRG representing in aggregate 40.04 per cent of the shares and votes in MRG, have undertaken to accept the Offer and tender all of their shares in MRG in the Offer, in accordance with the below: 

  • Henrik Bergquist, member of the board of directors of MRG and representing directly or indirectly 13.53 per cent of the shares and votes in MRG;
  • Hans Fajerson, representing 12.10 per cent of the shares and votes in MRG;
  • Fredrik Sidfalk, representing directly or indirectly 7.37 per cent of the shares and votes in MRG;
  • Karl Trollborg, representing directly or indirectly 2.76 per cent of the shares and votes in MRG;
  • Martin Trollborg, representing directly or indirectly 2.43 per cent of the shares and votes in MRG;
  • Tommy Trollborg, member of the board of directors of MRG and representing 1.03 per cent of the shares and votes in MRG; and
  • Anita Trollborg, representing by way of proxy on behalf of Karl Trollborg 0.82 per cent of the shares and votes in MRG.

The undertakings to accept the Offer will lapse in the event that a third party, prior to the expiry of the initial or any extended acceptance period for the Offer, makes an offer for all shares in MRG which corresponds to an offer value exceeding the price in the Offer by at least 8 per cent per share, provided that William Hill does not match such competing offer within 10 business days of its announcement. The undertakings will further lapse in case the Offer has not been declared unconditional before 15 February 2019.

MRG’s outstanding incentive programmes

The Offer does not include the warrants issued as part of MRG incentive programmes for employees and the warrants issued to members of MRG’s board of directors. Participants in the programmes will be given a fair treatment with respect to their holdings of warrants by way of a cash consideration.

Conditions for the Offer

Completion of the Offer is conditional upon:

  1. the Offer being accepted to such an extent that William Hill becomes the owner of shares representing more than 90 per cent of the outstanding shares in MRG;
  2. no other party announcing an offer to acquire shares in MRG on terms that are more favorable to the shareholders of MRG than those of the Offer;
  1. all regulatory, governmental or similar clearances, approvals and decisions necessary to complete the Offer, including approvals and clearances from competition authorities, being obtained, in each case on terms which, in William Hill’s opinion, are acceptable;
  1. neither the Offer nor the acquisition of MRG being rendered partially or wholly impossible or significantly impeded as a result of legislation or other regulation, any decision of court or public authority, or any similar circumstance, which is actual or can reasonably be anticipated, and which William Hill could not reasonably have foreseen at the time of announcement of the Offer;
  1. save as publicly announced by MRG or as otherwise disclosed by MRG to William Hill prior to the date the Offer was announced, William Hill does not discover that any information publicly disclosed by MRG or otherwise made available by MRG to William Hill is materially inaccurate or misleading or that any material information which should have been publicly disclosed by MRG has not been so disclosed;
  1. no circumstances, which William Hill did not have knowledge of at the time of announcement of the Offer, having occurred that have or can be expected to have a material adverse effect upon MRG’s sales, results, liquidity, equity or assets; and
  1. MRG not taking any measures that are liable to impair the prerequisites for making or implementing the Offer.

 The Offer is not conditional on financing. William Hill reserves the right to withdraw the Offer in the event that it is clear that any of the above conditions is not satisfied or cannot be satisfied. However, with regard to conditions 2-7, the Offer may only be withdrawn where the non-satisfaction of such condition is of material importance to William Hill’s acquisition of MRG.

William Hill reserves the right to waive, in whole or in part, one, several or all of the conditions set out above, including, with respect to condition 1, to complete the Offer at a lower level of acceptance.

Financing

The consideration payable to MRG’s shareholders will be funded by cash on William Hill’s balance sheet or through existing credit facilities.

Accordingly, completion of the Offer is not subject to any financing condition.

Due diligence

The board of directors of MRG has, at the written request of William Hill, permitted William Hill to carry out a limited due diligence review of MRG in connection with the preparation of the Offer. Except for certain information regarding MRG’s results for the third quarter 2018, that was made public through the Company’s Q3 report on 26 October 2018, William Hill has not received any inside information during the due diligence process.

William Hill in brief

William Hill PLC is one of the world’s leading betting and gaming companies, employing around 16,000 people. Founded in 1934 and listed on the London Stock Exchange, it aims to provide gamblers with a fun and safe gambling experience, and has set the ambition that nobody is harmed by gambling. The majority of its £1.7bn annual revenues are still derived from the UK, where it has a national presence of licenced betting offices and one of the leading online betting and gaming services. William Hill Online is headquartered in Gibraltar and serves online customers in the UK and elsewhere throughout the world. In 2012, it established William Hill US with a focus on retail and mobile operations in Nevada, which is now the largest sports betting business in the US. It currently operates race and sports books in Nevada, New Jersey, Mississippi, West Virginia and Iowa, is the exclusive risk manager for the sports lotteries in Delaware and is the exclusive partner to IGT to provide sports betting services to the lottery in Rhode Island. It also has licensed operations in The Bahamas and St. Kitts. William Hill PLC is listed on the London Stock Exchange and is a member of both the FTSE 250 and FTSE4Good Indices.

MRG in brief

MRG is a fast-growing, innovative iGaming Group with operations in 13 markets. MRG offers a superior experience in a Green Gaming environment. MRG was founded in 2007 and operates the iGaming sites Mr Green, Redbet, 11.lv, Vinnarum, Bertil, MamaMiaBingo, BingoSjov and BingoSlottet. The Group had a turnover of SEK 1,192.0 million in 2017 and has over 300 employees. MRG has gaming licences in Denmark, Italy, Latvia, Malta and the UK, and sportsbook licence in Ireland. MRG is listed on Nasdaq Stockholm in the Mid Cap segment under the name Mr Green & Co (ticker MRG). Read more at www.mrggroup.com.

MRG’s employees

William Hill recognize the capabilities and skills of MRG’s dedicated management and employees and look forward to welcoming these talented individuals to the William Hill group. After the completion of the Offer and a careful review of the capabilities and needs of the new combined operations, the optimal structure for future success will be determined. There are currently, before completion of the Offer, no decisions on any material changes to MRG’s employees and management or to the existing organization and operations, including the terms of employment and locations of the business.

Indicative timetable

The acceptance period for the Offer is expected to commence around 10 December 2018 and end around 11 January 2019. An offer document regarding the Offer is expected to be made public shortly before the commencement of the acceptance period. Assuming that the Offer is declared unconditional no later than around 11 January 2019, settlement is expected to begin around 17 January 2019.

William Hill reserves the right to extend the acceptance period for the Offer, as well as the right to postpone settlement.

The indicative timetable for the Offer has been set to reflect the review periods of the relevant competition authorities, the completion of which is expected to occur in the beginning of January 2019. If all relevant competition authorities have reviewed the Offer and the acquisition of MRG or if William Hill waives condition (3) above, in such time that the acceptance period can be closed before 11 January 2019, William Hill may announce a new end date of the acceptance period, subject to that such announcement can be made not less than two weeks prior to the new end of the acceptance period.

Compulsory redemption and de-listing

In the event that William Hill, whether in connection with the Offer or otherwise, becomes the owner of shares representing more than 90 per cent of the outstanding shares in MRG, William Hill intends to commence a compulsory acquisition procedure under the Swedish Companies Act to acquire all remaining shares in MRG. In connection therewith, William Hill intends to promote a de-listing of the Company’s shares from Nasdaq Stockholm.

Applicable law and disputes

The Offer shall be governed by and construed in accordance with the laws of Sweden. Nasdaq Stockholm’s Takeover Rules (the “Takeover Rules”) and the Swedish Securities Council rulings and statements regarding the interpretation and application of the Takeover Rules, and, where appropriate, the Swedish Securities Council’s rulings and clearance regarding interpretation and application of the Swedish Industry and Commerce Stock Exchange Committee’s rules previously applicable to public takeover offers on the stock market, apply in relation to the Offer. In accordance with the Swedish Takeover Act, William Hill has undertaken, in writing, towards Nasdaq Stockholm to comply with the above mentioned rules, rulings and statements, and to submit to any sanctions imposed by Nasdaq Stockholm upon breach of the Takeover Rules. William Hill has informed the Swedish Financial Supervisory Authority about the Offer and the undertaking towards Nasdaq Stockholm. The courts of Sweden shall have exclusive jurisdiction over any dispute arising out of or in connection with the Offer and the City Court of Stockholm shall be the court of first instance.

Advisers

William Hill has retained Citigroup Global Markets Limited as exclusive financial advisor and corporate broker and Vinge as legal advisor.

 

Enquiries

William Hill

Lyndsay Wright, Director of Strategy and Sustainability             +44 (0) 20 7612 3000

Tom Randell, Head of IR

Ciaran O’Brien, Director of Corporate Communications

 

Citigroup (Financial Adviser and corporate broker to William Hill)

Jan Skarbek                                                      +44 (0) 20 7986 4000

Lars Ingemarsson

Tom Jacob

Robert Farrington (Corporate Broking)

 

For further information, see www.williamhillplc.com.

 

William Hill will be holding a Capital Markets Day on 6 November.

 

This is information that William Hill is obliged to make public pursuant to the EU Market Abuse Regulation and pursuant to the Takeover Rules. This press release was submitted for publication on 31 October 2018 at 08.00 (CET).

 

Important notice

This is a translation of the original Swedish language press release. In the event of discrepancies, the original Swedish wording shall prevail.

The distribution of this press release and any related Offer documentation may in certain jurisdictions be restricted or affected by the laws of such jurisdictions. Accordingly, copies of this communication are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any such jurisdiction. Therefore, persons who receive this communication (including, without limitation, nominees, trustees and custodians) and are subject to the laws of any such jurisdiction will need to inform themselves about, and observe, any applicable restrictions or requirements. Any failure to do so may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, William Hill disclaims any responsibility or liability for the violations of any such restrictions by any person.

The Offer is not being made, and this press release may not be distributed, directly or indirectly, in or into, nor will any tender of shares be accepted from or on behalf of holders in, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States or any other jurisdiction in which the making of the Offer, the distribution of this press release or the acceptance of any tender of shares would contravene applicable laws or regulations or require further offer documents, filings or other measures in addition to those required under Swedish law.

This announcement include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout this announcement and the information incorporated by reference into this announcement and may include statements regarding the intentions, beliefs or current expectations of the directors, William Hill or the Group concerning, amongst other things: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies, the expansion and growth of William Hill’s, the Group’s or the MRG business’ operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation and industry changes on the business of William Hill, the Group, or MRG.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond William Hill’s ability to control or predict. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition, liquidity, and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in this announcement and/or the information incorporated by reference into this announcement. The same applies in respect of the MRG business that is the subject of the Offer. Any forward-looking statements in this announcement speak only as of the date of this announcement and are subject to risks relating to future events, other risks, uncertainties and assumptions relating to William Hill’s operations and growth strategy, and a number of factors that could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. Such factors include, without limitation, the possibility that the Offer will not be pursued or consummated, failure to obtain necessary regulatory approvals or to satisfy any of the other conditions to the Offer if it is pursued, adverse effects on William Hill share price and operating results because of a failure to complete the Offer, failure to realise the expected benefits of the Offer, negative effects relating to the announcement of the Offer or any further announcements relating to the Offer or the consummation of the Offer on the William Hill share price, significant transaction costs and/or unknown liabilities, general economic and business conditions that affect William Hill, the Group or the MRG business following the Offer, changes in global, political, economic, business, competitive, market and regulatory forces, industry trends, future exchange and interest rates, changes in tax laws, regulations, rates and policies, future business combinations or disposals and competitive developments, and other factors discussed in this press release. Undue reliance should not be placed on any forward-looking statements.

Subject to the requirements of the FCA, the London Stock Exchange, the Market Abuse Regulation (596/2014), the Listing Rules and the Disclosure and Transparency Rules (and/or any regulatory requirements) or applicable law, William Hill explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward-looking statements in this announcement. No statement in this press release is intended as a profit forecast or profit estimate and no statement in this press release should be interpreted to mean that the earnings per share of William Hill as altered by the Offer will necessarily match or exceed the historical or published earnings per share of William Hill or the relevant entities which form the basis for the transaction.

 

(1) Based on 40,849,413 outstanding shares in MRG. In the event that MRG should pay any dividend or make any other value transfer prior to the settlement of the Offer, the price per share in the Offer will be reduced correspondingly.

(2) The board members Henrik Bergquist and Tommy Trollborg have not participated in the board of director’s evaluation of or discussions regarding the Offer due to conflict of interest, see further section “Undertakings by shareholders”.

(3) Based on 40,849,413 outstanding shares in MRG. In the event that MRG should pay any dividend or make any other value transfer prior to the settlement of the Offer, the price per share in the Offer will be reduced correspondingly.

(4)The board members Henrik Bergquist and Tommy Trollborg have not participated in the board of director’s evaluation of or discussions regarding the Offer due to conflict of interest, see further section “Undertakings by shareholders”.