William Hill's largest investor 'extremely concerned' about merger

William Hill’s largest investor has come out against its proposed merger with PokerStars owner Amaya, saying the UK bookmaker should pursue a sale instead.

Parvus Asset Management, a London-based activist investor that owns over 14% of William Hill, said it was “extremely concerned” by the potential combination with the Canadian online gambling company, which had “limited strategic logic” and would destroy shareholder value.

Amaya’s core poker business would weaken William Hill’s position in the market as that business is unattractive, Parvus said in a letter to William Hill’s board.

“We strongly encourage that the board and management stop wasting valuable time and shareholder resources pursuing this value-destroying deal,” said the letter, signed by Parvus co-founders Mads Eg Gensmann and Edoardo Mercadante.

William Hill should consider “all alternative options available, including a sale,” they added.

“Given the strategic fit, diversification and potential synergies we have a responsibility to all our shareholders to fully assess this,” a William Hill spokesperson said. “However it is premature for us to draw conclusions while this work is ongoing.”

William Hill and Amaya said on October 10 that they were discussing a potential merger of equals, and the combined company would be worth around $5.5bn.

William Hill recently staved off a takeover by smaller rivals 888 Holdings and Rank Group, and is seeking a new chief after ousting James Henderson after only two years in the job — after the board lost patience with the slow pace of growth under his leadership.

William Hill had rejected the €4.2bn bid, believing it undervalued its business, and said that it saw no merit in engaging with its suitors.

Amaya has faced the possibility of being taken private by former chief executive David Baazov.

William Hill’s shares were little changed, at 299p, in London trading yesterday.