Bad News For William Hill
Published: Friday, August 05, 2005 Online-Casinos.com
BAD NEWS FOR WILLIAM HILL
Betting group has to shed 76 betting shops
British betting group William Hill was on the wrong end of an Office of Fair
Trading ruling this week when the government body insisted that the company
sell 78 of the 624 betting shops it bought from Stanley Leisure earlier this
year as a condition of clearing the deal.
William Hill's CEO David Harding may have foreseen problems when he said at
the time of the purchase that he thought he would have to sell between 30 and
50 shops to satisfy the competition authorities. He said yesterday that he was
"disappointed" by the OFT's decision.
The group spent GBP 504 million on the shops.
The concern is that William Hill, as a forced seller, will not be able to get
a good price for the shops it has to sell. It sold 28 of them to the Tote last
month for GBP 15 million, an average of GBP 536,000 each shop or a 34 percent
discount to the average price of GBP 808,000 it paid Stanley. Analysts were
pessimistic about the price it is likely to achieve for the rest.
However CEO Harding insisted this would not be the case. "The market for
betting shops is very competitive. We will get a healthy price for them,"
he said. He also insisted that he was "very happy" with the price
that the Tote paid.
William Hill will start converting the Stanley shops in the next few weeks and
insisted that the OFT decision did not derail the company's plans to make GBP
13 million of savings from the deal.
