Parvus Asset Managmenet is a leading investor of William Hill who recently announced their opposition to a reverse takeover of Amaya Gaming based on limited strategic logic. An open letter was provided to the board of Will Hill by Parvus yesterday which stated that such a deal would destroy shareholder value and the group would like to see alternative options provided for maximization of shareholder value.
Reports surfaced just a few days ago with confirmation soon after from both companies that discussions were taking place to see a merger between the two companies. This revelation came just two months after a takeover proposal by 888 Holdings and the Rank Group was rejected by William Hill.
Reuters spoke with Parvus Co-Founder Mads Eg Gensmann on the matter who stated that it should not take more than five minutes of the board’s time to realize that the deal does not pass the smell test. Gensmann does not have a preferred strategic option but told Reuters that he would like to see the board evaluating each option available of its merits. The co-founder of Parvus added that the board’s judgement of the Amaya deal pursuit is clearly lacking.
Will Hill believes otherwise. A spokesman for the company stated that the board has a responsibility to fully assess the deal with Amaya given the strategic fit, diversification and potential synergies of the option. The spokesman did say it is premature to draw conclusions while the work is ongoing and the board will not be coming forward with a transaction unless they are satisfied with the interests of every shareholder.
Parvus has a just over $460 million economic interest in William Hill with the company stating they are the largest investor of the gambling brand. 14.3% of the outstanding shares are derivatives known as contracts-for-difference. According to Reuters, this would be converted to shares if the deal with Amaya was put to a vote. Parvus feels the financial structure of a potential deal would be more to the benefit of shareholders of Amaya rather than Will Hill.
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