he talks could cause the departure of William Hill from Spain, according to British financial analysts, although both firms assure that the possibility is not being considered right now.
“Negotiations affect the future strategic direction of the joint venture”, affirm speakers from William Hill and Codere. It is expected that the alliance, which operates under the name of Victoria in Madrid and under the name of Garaipen in the Basque Country, stops the opening process of new centers after the revision of objectives.
The slowdown in the activity of the joint venture, that currently has 74 centers, after two years of activity, has to do with the conclusion of the first phase of investments, according to Codere, but it also has to do with the impact of the crisis in the business, William Hill admits.
The Brisith company, leader in the UK betting sector, is not very satisfied with its first steps in Spain, in fact, it has reconsidered its participation in the joint venture with Codere, to acknowledge the depreciation of its value and the difficulty to recover the money invested. The negative impact of the 2008 results of this provision is 6.2 million euros, which William Hill justifies due to the “damage of the economic conditions in Spain”.
That adjustment is equivalent to around half of which William Hill has invested in the joint venture. On top of that extraordinary adjustment, the joint venture suffered operating loss of around 10 million euros in 2008, due to the expenses of the launching of the activity and the low collection.