VC Holdings GVC., a junior partner in the deal, will take Sportingbet's businesses in other parts of the world where regulatory rules are less clearly defined and risks are higher. William Hill, which bought three businesses in the U.S. state of Nevada earlier this year, and GVC have until November 13 to make a formal offer. The proposal that Sportingbet said on Tuesday it would agree to is a mix of cash and stock that would value its shares at us$ 0.98, up from a us$ 0.83 offer rejected two weeks ago.
Australia is the mainstay of Sportingbet's business. The company is a market leader in Australian telephone and online gaming and the unit accounted for almost 70 of company revenues and almost all of its profit in its last financial year. Analysts said a rival suitor could emerge as there was no exclusivity agreement. William Hill and GVC first said on September 19 they might make a joint offer for Sportingbet.
Ladbrokes, William Hill's closest competitor in Britain, held takeover talks with Sportingbet last year. The deal foundered on regulatory worries linked to Sportingbet's Turkish business. GVC subsequently bought Sportingbet's Turkish language website.
"We continue to believe that a bidder capable of extracting synergies from Sportingbet's businesses would be able to pay us$ 1.45 per share," Numis Securities analyst Ivor Jones said. "Sportingbet is now in play and likely to be seeking such a bidder."
The latest proposal from William Hill and GVC comprises us$ 0.77 cash, a us$ 0.17 dividend being paid by Sportingbet, and 0.0475 new GVC share per Sportingbet share.
Panmure Gordon downgraded Sportingbet shares to "hold" from "buy", saying the likelihood of a counterbidder was low. William Hill shares were up 3.4 percent to us$ 0.54, while Sportingbet added 1.4 percent to us$ 0.86.
Trading in GVC shares, listed on the junior AIM market, was suspended at the company's request. GVC said this was because detailed information on the parts of the business it might acquire had not yet been extracted from Sportingbet's accounts. "Subject to reaching agreement upon its detailed terms and conditions, the board of Sportingbet has confirmed to William Hill and GVC Holdings that if such an offer were to be made, the board of Sportingbet would expect to unanimously recommend it to Sportingbet shareholders," the company said.