William Hill considers joint bid for rival Sportingbet

William Hill Plc, owner of William Hill U.S. and 159 sports books and kiosks in Nevada, is considering a possible joint offer for rival Sportingbet Plc, the bookmaker said Wednesday.

William Hill and GVC Holdings Plc said they are in the preliminary stages of negotiations. The two companies currently plan that any offer for Sportingbet would be made substantially in cash.

"It is currently envisioned that any possible offer would be structured such that when completed William Hill would acquire the Australian and certain other locally licensed business of Sportingbet and GVC would require the remaining parts of the business," William Hill said in a statement.

If the acquisition is completed, it would mark the return of William Hill to the Australian gaming market. The British bookmaker shut down its online sports wagering business in Australia on June 4 as its license application was pending with Nevada gaming regulators.

William Hill was licensed in Nevada on June 21. Sportingbet operates sportsbooks in Great Britain, virtual games and casino sites, and online poker.

The regulated business would be acquired by an entity of William Hill and not William Hill Online, the company's joint venture with Playtech Ltd.

James Wheatcroft, an equity analyst with Jeffries, questioned the timing of any acquisition. "The timing is complicated by the looming option to acquire the 29 percent Playtech (stake) in William Hill Online," he said. "Bidding up the competition ahead of a possible deal with Playtech adds further interest."

William Hill has until November to decide whether to exercise its option to buy out Playtech, which paid about $319.7 million in 2008 for its stake in William Hill Online. Wheatcroft said from William Hill's perspective, the Sportingbet acquisition "opens up another regulated market where other European gaming operators - Paddy Power and Betfair - have enjoyed strong momentum."

No formal approach has been made to Sportingbet's board. The parties have until Oct. 16 to announce a firm offer.

Ladbrokes Plc, one of William Hill's main rivals, had considered an acquisition of Sportingbet, but talks broke down over regulatory issues. Ladbrokes in January spent $3 million to acquire 65 percent of Stadium Technology Group, a Las Vegas-based supplier of software and in-game betting applications to sports book operators.