William Hill Bid £241m For Online Gambling Giant MRG

The UK division of global bookmaker William Hill has announced a SEK2.82b (US$306.7m) offer to acquire the well-known online gambling operator MRG, formally known as Mr Green.
Announced on Wednesday the 31st October, William Hill announced their bid to acquire the Stockholm-listed MRG at a price of SEK69 ($7.50) per share, which directly represents a 48.5% premium on the MRG share price, at the close of trading on Tuesday the 30th October, on the Nasdaq Stockholm.

According to a statement issued by the MRG board of directors, they reportedly advised shareholders to accept the deal – and already, seven major shareholders (who, collectively control a 40% stake in the country) have indicated that they will be willing to make the deal.

While confirmation will likely take a while (early reports state that an official document will be published at the beginning of December), both companies legal teams are reportedly meeting already, discussing the deal and putting the wheels into motion. The deal is, assuming all goes well, expected to finalize by January 11, 2019, although it’s worth pointing out that the deal is subject to the usual and to-be-expected regulator approvals, in both companies’ respective markets.

Philip Bowcock – CEO of William Hill – explained his companies interest in MRG as a means of accelerating Hill’s diversification, “immediately making us a more digital and more international business.”. The acquisition will also likely see William Hill move away from a single-facing brand, to one that suits a more broad and varied range of markets – and it’s also likely we’ll see the company attempt to penetrate more Scandinavian markets, given MRG’s base in Sweden.

In fact, MRG is well-suited for expansive growth, as the company already holds licenses in Denmark, Ireland, Italy, Latvia, Malta and the UK, and they expect to be granted a Swedish license too, by the end of 2018. This will make it far easier for William Hill to expand into new markets, as the company has largely focused its efforts on its UK and newly-promoted US-facing brands.

Calvin Ayre reported:
“MRG’s Q3 report card showed the benefits of the company’s recent acquisition spree, with revenue up nearly 51% to SEK445m ($48.4m), earnings up 49.4% to SEK75.5m and net income up 32% to SEK40.4m. Even stripping out the acquisitions, MRG’s organic growth in local currencies was 27.8%. MRG derives 40% of its revenue from Western Europe, 36% from the Nordics and 21% from Central, Eastern and Southern Europe.”
William Hill have also pointed out that they believe their company will be a “good match” for MRG, due to the ethics compatibility – something which Hill’s spokespeople say is made possible to the two companies dedication to responsible gambling – something that William Hill have focused on in their “Nobody Harmed” campaigned, and MRG’s “Green Gaming” predictive technology.
This has caused some small controversy, however, given that MRG have recently been hit with a €312k penalty from the Netherlands gambling regulator, as the company were found to be serving local Dutch punters without proper permission. MRG don’t seem too bothered by this, however, with their CEO Per Normal telling analysts that “business was as usual in the Netherlands”. This is despite warnings from the Dutch regulators that operators who have been officially sanctioned will have to endure a “time out” period when the Dutch regulated market finally launches – although it remains to be seen how this will be implemented exactly.
As for now, however, the move looks set to be a positive one for William Hill, and their share price enjoyed a 10% increase upon releasing the acquisition offer – although it has, since, dropped back down to around the +4% range.