Report: PPB and Crownbet the two finalists in Hills Australia auction

Paddy Power Betfair and Crownbet – now majority owned by Stars Group – are the two finalists to buy William Hill’s Australia business, according to local reports.

The Australian Financial Review said the two bidders emerged from a group of four, with both now given access to Hill’s ‘black box’ of corporate secrets to help them “sharpen up their offers”.

The Hills business is expected to be worth about £113m, although the price could be driven up by the recent Crownbet acquisition.

In the wake of that deal, several analysts noted that the 31x multiple paid by Stars would only make sense if it could build further scale by adding the Hill’s business to Crownbet.

Canaccord Genuity’s Simon Davies said: “I would definitely make Stars odds-on [to buy the Hills business].

“I think the CrownBet acquisition only makes sense if it can be combined with William Hill, to drive material synergies and scale advantages. Unless Paddy Power Betfair force them to pay over the odds!”

David Jennings from Davy also suggested the Hill business would add greater marginal value for Stars/Crown than to PPB/Sportsbet.

“It’s a case of ‘need to buy’ for Stars versus ‘nice to buy’ for Sportsbet,” Jennings added.

“That said, if Sportsbet manage to win the bid, it would still be a real win, blocking anyone else getting the asset. And I still believe Sportsbet can extract more synergies than anyone else, so they have a fighting chance.”

A preferred bidder is expected to be selected in the next week.