Stars Group ups CrownBet stake to 80% amid Hills takeover
PokerStars-owner spends another $81m to increase stake in new William Hill Australia owner
The Stars Group has upped its stake in CrownBet to 80%, as part of the transaction to acquire William Hill Australia.
Stars last week bought 62% of CrownBet for $117m, but today announced it had bought an additional 18% stake for approximately $81m.
The increase in stake was announced alongside CrownBet’s acquisition of William Hill Australia, giving Stars control over the two businesses which each hold around 10% of the Australian online betting market.
Stars’ total outlay for the two deals announced today is $315m, bringing its total investment in Australia in the last week to approximately $432m, to be paid for in cash and newly-issued shares.
“These acquisitions will further increase our exposure to the attractive regulated Australian sportsbook market and create a player of scale and clear rival to the top two operators there,” said Rafi Ashkenazi, CEO of The Stars Group.
“With complementary geographic profiles, we expect the combined business to leverage CrownBet’s operating and proprietary technology platform and be well positioned for growth and to navigate the ongoing regulatory and taxation changes in the Australian market.”
The combined businesses will be led by CrownBet’s management team, including CEO Matthew Tripp.
Stars estimated the two firms would realise cost synergies of approximately $39m a year beginning in 2019 after a period of integration and rebranding costs – enough to offset a potential nationwide POC tax.
Which brand the new business will operate under in Australia is still up in the air, with the William Hill brand struggling in recent months and land-based business Crown Resorts owning the rights to CrownBet from next year.
Possible options could include brands owned by Hills such as Sportingbet, Centrebet or tomwaterhouse.com.
“I am excited to partner with The Stars Group,” said Matthew Tripp, CEO of CrownBet.
“We believe the acquisition of the William Hill Australia business gives us the scale and customers to become a leading force in the market and the tools we will need to prepare for potential positive regulatory movement in other jurisdictions.”
The management team of CrownBet will be entitled to an additional payment of up to approximately $181m in 2020 subject to certain performance conditions.