Poll: What will Playtech do with the £424m from William Hill?
If you were the Playtech board for a day, how would you spend the money received for the 29% stake in William Hill Online.
Last week saw William Hill announce plans to exercise its call option on Playtech’s 29% stake in William Hill Online (WHO), agreeing to buy out its JV partner for £424m.
The valuation, once approved by Hills’ shareholders, will see Playtech receive a 3.5x mark-up on its original investment. But how will the Israeli software provider reinvest the money?
It remains to be seen whether Playtech opts to spend some of the cash trying to replicate what CEO Mor Weizer described as an “overwhelming success” by attempting to negotiate a similar JV deal with another major operator “ the market arguably throws up fewer obvious candidates for such a deal than it did in 2009 when the WHO deal was struck.
The London-listed provider might instead opt to take a large stake in an operator itself, while maintaining its software supply deal with WHO as William Hill looks to continue building on the strength of its egaming arm.
Last year saw Playtech set aside 95m for investment in social gaming and the company may well look to take this a step further following June’s software licensing deal with Games OS (formerly CTXM) and Viaden Gaming.
As well as social gaming, the board might wish to expand Playtech’s mobile footprint in the light of eGR readers recently identifying mobile as the key area of investment in 2013.
Or might Playtech now turn its attention to the United States, an area where some of its key personnel are believed to have been placed under scrutiny by stringent Nevada regulators in their assessment of Hills’ licence application?
Alternatively the company might opt to follow the lead of PokerStars and others, and invest in the land-based sector in preparation for an eventual entry into a regulated US egaming environment.
With many options available and a huge sum of cash to spend, Playtech’s next move could be extremely significant. But if you were the Playtech board for the day, what would you do?
Vote in the poll on the right-hand side of the page, or visit the eGaming Review LinkedIn group.