William Hill Blasted By Largest Shareholder Over Amaya Merger Talks
William Hill’s proposed merger talks with the parent company of PokerStars, Amaya Gaming has ruffled a lot of feathers both within and outside the company. The largest shareholder of William Hill, London- based Parvus Asset Management has been quick to fiercely oppose the deal which could create one of the largest gambling companies in the world. They said they were “extremely concerned” by the merger talks and went on to say that the idea behind the merger was based on “limited strategic logic”.
Leaving no room for interpretation, the co-founders of Parvus, Mads Eg Gensmann and Edoardo Mercadante told the board to go as far as to pursue all alternative options available including a sale of William Hill.
Parvus objections center around the idea that online poker where Amaya generates most of its revenues is a mature and structurally declining revenue stream in contrast to other verticals like casino. Gensman even told Reuters that it “shouldn’t take more than five minutes of the board’s time to realize this deal doesn’t pass the smell test.”
Anthe major concern of Parvus is the double standards employed by William Hill in terms of carrying debt which at the time of takeover talks with Rank and 888 were voiced by William Hill as a reason to reject the deal. However Parvus are quick to point out that the debt of that deal would have been £2.2 billion while the Amaya merger would involve carrying a debt of £2.8 billion.
In response to the outspoken comments by Parvus , William Hill said,” Given the strategic fit, diversification and potential synergies we have a responsibility to fully assess this, however it is premature for us to draw conclusions . . . the board would not come forward with a transaction unless it was satisfied it was in the interests of all shareholders.’