Major William Hill shareholder slams Amaya merger rationale
Parvus Asset Management said it will oppose a reverse takeover of the Canadian operator if a formal proposal is made as it would "destroy shareholder value"
William Hill’s largest shareholder, Parvus Asset Management, last night criticised the rationale for the operator’s reverse takeover of Amaya and said it would “actively oppose” any formal proposal.
In an open letter to the William Hill Board, Parvus said the deal would “destroy shareholder value” and urged it to instead consider alternative options, including a sale of the company.
The hedge fund sponsor, which owns 14.3% of William Hill, also claimed a tie-up with Amaya would offer little strategic value to Hills and accused the operator’s management of “double standards” after refusing to consider a deal with 888 and Rank two months ago.
“In light of the Board and Management’s fiduciary duties, you urgently need to explain why you are applying such blatant double standards while evaluating alternative courses of action,” Parvus said in its letter.
“We strongly encourage that the Board and Management stops wasting valuable time and shareholder resources pursuing this value-destroying deal,” the letter continued.
William Hill and PokerStars-owner Amaya announced last week the two online gambling heavyweights were in discussions to a complete a deal described as a “merger of equals”.
Both operators have since provided statements in response to Parvus’ letter to the William Hill Board.
Amaya’s statement read: “The Parvus letter contains inaccuracies that can be dispelled through reading Amaya’s public filings, which will attest to the high-quality, consistent profitability and stable growth prospects of our business.
“Further comment on any potential agreement is best provided if there is a proposed transaction put forward by Amaya’s Board.”
A William Hill spokesperson added: “Given the strategic fit, diversification and potential synergies we have a responsibility to all our shareholders to fully assess this. However it is premature for us to draw conclusions whilst this work is ongoing.”
The two firms also received support from activist investor Jason Ader, who helped push through bwin.party’s sale to GVC in 2015.
Ader tweeted on Thursday night: “William Hill’s stock has significant downside price risk without Amaya. It’s just the transformative deal they need to reboot this company.”
He followed that up with a second tweet saying: “The synergy and revenue enhancements in a Hills Stars combination is far greater than people realize. Deal makes perfect sense.”
Amaya’s share price was down 6.20% last night on the Toronto Stock Exchange, while William Hill’s today was up 3.48% to 309.41p at the time of writing.