• Fri. Sep 24th, 2021

Caesars Inherits 24.5 % NeoGames Stake Via William Hill Acquisition


Aug 29, 2021

Posted on: August 28, 2021, 09:41h. 
Final up to date on: August 28, 2021, 09:41h.

Todd Shriber Learn Extra

Caesars Leisure (NASDAQ:CZR) is getting a pleasant sweetner because of its just lately accomplished acquisition of William Hill: A stake in iLottery supplier NeoGames (NASDAQ:NGMS).

Caesars Palace Las Vegas. The operator will get a 24.5 p.c in NeoGames from shopping for William Hill. (Picture: Getty Photographs)

In a Schedule 13G submitting with the Securities and Trade Fee (SEC) launched Friday, Caesars revealed it owns 6.12 million shares of NeoGames, or 24.5 p.c of the corporate’s shares excellent as of April 12.
Primarily based on NeoGames’ closing worth of $42.18 yesterday, Caesars’ curiosity within the Israeli firm is value $258.44 million. That goes a good distance towards defraying the $3.69 billion the on line casino behemoth shelled out to buy William Hill.
NeoGames, which went public final November, is up 11 p.c year-to-date, however is off 42.64 p.c from its file excessive set in early June.
Caesars Doable Plans for NeoGames Funding
Caesars’ SEC doc doesn’t point out an intent by the gaming firm to be an activist investor in NeoGames. Activists, normally hedge funds or different institutional buyers, push for some kind of change, together with spin-offs, gross sales of lagging companies, share buybacks and the like.
Caesars is within the enterprise of operating built-in resorts, sportsbooks and on-line casinos — not being a company raider. Nonetheless, NeoGames is an asset with appreciation potential for Caesars and one with a compelling enterprise mannequin.

The Israeli firm offers on-line lottery providers and options to quite a lot of state-level clients throughout the US and is the one pure-play fairness on this class. The thesis underpinning the title is acquainted. Elevated adoption by states, echoing the chorus typically heard concerning operators of web casinos and on-line sportsbooks.

Within the US, NeoGames can also be operational in New Hampshire, North Carolina, and Virginia, and is pursuing iLottery contracts in Alaska, Connecticut, Maryland, Massachusetts, Missouri, Ohio, and Oregon. It additionally offers iLottery providers in Alberta, Canada and a few international locations in Europe.
Don’t bet on an Acquisition…But
Just because an organization owns a stake in one other doesn’t imply a takeover will come to go and that’s prone to be true over the near- to medium-term concerning Caesars and NeoGames.
The Harrah’s operator is contemporary off the William Hill buy and within the technique of auctioning off that entity’s worldwide operations whereas making an attempt to create value efficiencies promised following the 2020 merger that created “new Caesars.”
Moreover, the on line casino operator is squarely centered on increasing its iGaming and sports activities betting footprints, just lately saying it plans to spend $1 billion over the subsequent a number of years to achieve marketshare in these industries. A minimum of for now, it seems unlikely that Caesars would need to pony up a major premium to NeoGames’ $1.04 billion market capitalization after which attempt to weave that enterprise into its present digital operations. Even when a wedding doesn’t come to go, Caesars will profit as NeoGames shares rise.

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