Caesars Entertainment announced that it is buying UK-based gambling group William Hill for about £2.9 billion ($3.7 billion) to tap the fast-growing U.S. sports-betting market. Shares of Caesars Entertainment rose about 2.9% on Wednesday.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
As part of the deal, U.S. casino operator Caesars (CZR) will pay 272 pence per share to each William Hill stockholder. Caesars said that it also plans to divest William Hill’s non-U.S. assets, which include more than 1,400 U.K.-based betting shops, and would integrate its U.S. business into its operations. The deal is expected to close in the second half of 2021 after getting antitrust and regulatory approvals.
Caesars’s CEO Tom Reeg said “William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to serve our customers in the fast-growing U.S. sports betting and online market.” (See CZR stock analysis on TipRanks).
Following the deal, Stifel Nicolaus analyst Steven Wieczynski raised the price target on Caesars to $80 (42.7% upside potential) from $67 and sees significant upside from the potential William Hill deal. The analyst reiterated his Buy rating on the stock and said “The way we view this transaction is yes, they are diluting existing shareholders by ~18% but in essence they are getting the remaining 80% of WH’s U.S. operations for free”.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 7 Buys and 3 Holds. The average price target of $60.1 implies upside potential of about 7.2%. Shares have dropped 6% year-to-date.
Related News:
Caesars Rolls Out Share Sale Amid $3.7B William Hill Bid
Juniper To Buy Netrounds; Street Says Hold
Total To Snap Up London’s Largest Car-Charging Network
