City firms primed for £165m payday from Caesars’ takeover of William Hill
Hills CEO Ulrik Bengtsson and CFO Matt Ashley to net 200% of annual salaries should deal go through
The £2.9bn merger between William Hill and Caesars Entertainment will see connected firms divvy up more than £165m in adviser fees, EGR has learned.
In the full scheme outline document published on 26 October, William Hill revealed it is set to pay advisers more than £41m in fees and expenses for a combination of financial, public relations, legal and other advice fees.
However, these costs are dwarfed by prospective parent company Caesars Entertainment, which will pay advisers an estimated £111m-£124m for services provided in respect of the takeover bid.
London-listed William Hill turned to Barclays, Citigroup and PJT Partners to advise it on the transaction, while Caesars is being guided by Deutsche Bank.
International law firms Linklater, Latham & Watkins, Skadden Arps Slate Meagher & Flom and Phelps Dunbar have been recruited by Caesars to handle the US side of the merger. Harris Hagan advised on UK-centric parts of the deal.
On the other side of the negotiating table, Hills enlisted Slaughter and May as its main legal adviser, with Weil, Gotshal & Manges advising the bookmaker on US anti-trust legal issues.
Within the scheme document, Hills suggested Caesars would make “no material change” to the overall employee headcount of the business following completion of the deal, with all employee salaries guaranteed via compensation, benefits or redundancy arrangements until 31 December 2022.
In addition, Caesars has said it will maintain operation of William Hill’s London headquarters until it divests Hills’ international businesses.
“Caesars has not yet had access to sufficiently detailed information to formulate detailed plans or intentions regarding the impact of the acquisition on the William Hill Group other than its overarching intention to focus on the US market as outlined above,” said William Hill.
“Following the completion of the acquisition, Caesars intends to transfer and integrate the whole of William Hill’s US business into the existing Caesars Group with minimal, if any, impact on employee headcount,” Hills added.
The acquisition is not expected to have any material impact on the existing business and employees of Caesars.
In addition, the US casino heavyweight has committed to implementing a key employee retention scheme that will see Hills CEO Ulrik Bengtsson and CFO Matt Ashley receive cash payments totalling 200% of their respective annual salaries subject to completion of the merger. The total value of this arrangement is £2.1m.
However, the bookmaker has revealed that all non-executive directors will resign from the business should the merger go through.
If Caesars is unable to complete the $2.9bn deal by the end of 2021, Caesars has agreed to pay Hills a reverse break fee of £270m.
Elsewhere, Hills has given rival bidder Apollo Global Management until 5pm on 12 November to announce a “firm intention” to make a new offer.
However, Apollo Global Management founder and CEO Leon Black is currently facing questions in the US over his alleged involvement with convicted sex-offender Jeffrey Epstein.
The New York Times suggests the firm’s investors have questioned his relationship with the disgraced American financier, alleging that at least one party has refused to make any further investment in the business.