Shares of William Hill (WIMHY) jumped after the company received separate offers for a potential acquisition from Apollo Global (APO) and Caesars Entertainment (CZR). Other names in the gambling space, which include Boyd Gaming (BYD), Churchill Downs (CHDN), DraftKings (DKNG), Flutter Entertainment (PDYPY), Gan Limited (GAN), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn National (PENN) and Wynn Resorts (WYNN), are in focus following the news.

WILLIAM HILL APPROACHED

Apollo Global Management has approached U.K. gambling company William Hill to discuss a potential takeover, Bloomberg first reported, citing people familiar with the matter. William Hill confirmed the cash approach, and also said it received a separate cash proposal from Caesars Entertainment. The company said in a statement: "Following an initial written proposal from Apollo on August 27, William Hill received a further proposal from Apollo and proposals from Caesars. Discussions between William Hill and the respective parties are ongoing." Each of Apollo and Caesars are required, by not later than 5.00 p.m. London time on October 23, to either announce a firm intention to make an offer for William Hill or announce that they do not intend to make an offer, the company added.

WHAT'S NOTABLE

In 2008, Apollo teamed up with TPG for a leveraged buyout of Harrah's Entertainment, which was later renamed Caesars Entertainment. In 2019, Apollo acquired a stake in Gamenet Group.

On September 1, Bloomberg reported that William Hill  closed its acquisition of sports-betting outfit CG Technology and is now looking to focus on combining its U.S. business with the online casino operations of partner Caesars Entertainment. The move comes as Caesars already owned 20% of William Hill's U.S. division under an agreement two years ago with Eldorado Resorts (ERI). "There’s a lot of opportunity in there, and we think that we’ve got some really powerful assets in this space, so obviously it’s an ongoing subject of discussion,” Joe Asher, the U.S. chief executive officer for William Hill, has said.

Combined, the U.S. sports and online-gaming operations of the two could generate $700M in revenue next year, Caesars previously said.

ESPN DEAL

Earlier this month, William Hill was included in a multiyear deal with cable sports channel ESPN (DIS). The company will become its odds supplier across platforms, the companies said in a statement.

Following the deal, Jefferies analyst James Wheatcroft said he thinks the ESPN deal will further increase William Hill's brand recognition in the U.S. and argued that momentum is building in the U.S. but "zero" was priced in at then-current share levels.

PRICE ACTION

In morning trading, shares of William Hill trading in New York popped 31% to $14.77. Others in the space, including Flutter Entertainment and Boyd Gaming, moved higher amid the news.