It was recently reported that the highly famous Canadian online gambling company, Amaya and William Hill have denied the merger talks. They seem no longer interested in the merger as a result of which, the British bookmaker is finding it hard to struggle to find an associate partner in this booming industry. Earlier, both the parties were all set to sign the merger deal of equals but the talks have now abandoned after the investor in William Hill showed his intentions to oppose the plan. After when William Hill decided to walk off, Amaya said that it can deliver the best shareholder value even by remaining dependent. The current talks about the merger deal and its expected consequences have been discussed as under.
In the Words of Mads Gensmann
It has been seen that the co-founder of Parvus, Mads Gensmann was happy about the termination of merger talks. He said that the decision to end entire merger talks with Amaya is good decision on the part of the board. From the perspective of William Hill, it is planning to work constructively regarding the shareholder value for the owners of William Hill with the board. Another fact is that the regulations related to the betting companies are tighter in Britain with the higher taxes in this part. These companies are required to adapt to an environment in which the millennial are being captivated by the online betting through their smartphones.
The Expected Rise in Amaya?s Revenue
Amaya Gaming has highlighted in its report that the company is expected to witness a rise of 10 percent in its third quarter. After it issued preliminary results after September 30, it showed the expected revenue to reach somewhere between $263 million to $273 million. No doubt, this figure is far more than the figures of quarter 3 of 2015, which was just $247 million. The company expects that 73 percent of its revenue will be contributed by poker and the rest 24 percent from casino operations and sportsbook. However, in 2015, the contribution of poker was 81 percent and casino operations were about 15 percent only. In addition to this, the major concern for the company is to make the final installment of the Rational Group that it purchased from Mark Scheinberg and Isai. It means that it is important for the company to have a merger deal continued with William Hill else, it would suffer.
The Consequences of the Aborted Merger Talks
It is very true that the termination of the merger talks have clearly hit the Amaya?s growth. The aborted merger talks show that Amaya is likely to face difficulty in growing and expanding. The company might not be able to develop as a standalone business. Some of the analysts of the community have also said that the company is facing a heavy debt load and various other legal problems already. This simply means that closing of the merger talks with William Hill will only be an added woe to the company. With this, the company has not even received the online poker license in 2016, as the same was predicted by the former CEO David Baazov. Amaya was further expecting Baazov to purchase the company but the offer for the same has not reached to any transaction.
It can be seen that the failure of the merger is going to affect both Amaya and William Hill in some or the other ways. However, it is also a fact that both of them are only highlighting their standalone power and strength. They are not coming up clearly with the consequences they will actually have to suffer because of the same.