Caesars Entertainment has priced its planned stock sale at $56 per share with the proceeds expected to help the casino operator fund a $3.7 billion purchase of sports betting operator William Hill.
Caesars said Tuesday that it plans to sell 31 million shares, with underwriters selling an over-allotment of an additional 4.65 million shares.
Shares of Caesars closed down Tuesday as part of a decline throughout much of the gaming sector. Caesars, traded on the Nasdaq, finished the day at $54.49, down $3.72 or 6.39%. It’s unclear what effect Tuesday’s decline would have on the stock offering.
In a filing with the Securities and Exchange Commission Monday associated with the stock deal, Caesars said it would seek to obtain $2 billion in new debt that would be secured by William Hill’s non-U.S. businesses.
Caesars confirmed its interest Monday in acquiring the UK-based William Hill, the parent company of William Hill US, which has rapidly become one of the nation’s leading sports betting operators with businesses in more than 170 retail locations across 13 states and an estimated 29% market share.
Private equity firm Apollo Global Management is also reportedly bidding to acquire William Hill.
Caesars currently owns 20% of William Hill, which would seem to tip the transaction its way. Caesars has 55 gaming properties in 16 states, and William Hill has opened 12 branded sportsbooks at Caesars’ properties in Nevada, Iowa, and New Jersey.
Pending regulatory approval, the remaining sportsbooks across the Caesars portfolio will be rebranded. The mobile sports betting app, Caesars Sports Book by William Hill, will soon be available in Indiana, Pennsylvania, New Jersey, and Nevada, also pending regulatory approvals.
Caesars said it expects to use the net proceeds from the stock sale for “general corporate purposes,” including the potential William Hill deal.
In the SEC filing, Caesars said the company’s focus would remain on the U.S. opportunities for sports betting and online gaming. The company said it would “to seek suitable partners or owners” for William Hill’s “presence in the UK and other non-US international markets.”
Most of William Hill’s U.S. sportsbooks are not associated with Caesars.
The company operates retail sportsbooks in Nevada, Michigan, New Jersey, Indiana, West Virginia, Illinois, Colorado, and Iowa, and is online in Iowa. It is also a licensed sports betting provider in numerous casinos in Mississippi and New Mexico and serves as the exclusive risk manager for the Delaware and Rhode Island sports lotteries.
In August, William Hill opened a sportsbook at the Capitol One Arena in Washington D.C. that features wagering kiosks.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
