888 Warns On Q1 Revenues; Revises Acquisition Terms Of William Hill’s Non-US Business

888 Holdings Plc. (888.L), an online betting and gaming company, Thursday said its first-quarter revenue is currently expected to be in the range of $222 million to $226 million, a mid-teens percentage decrease from last year, primarily reflecting the previously announced regulatory and compliance impacts, including the temporary closure of The Netherlands. Sequentially, revenues will increase 0-2%.

Further, the company said it has revised transaction terms of its planned acquisition of international or non-US business of William Hill.

The company noted that the enterprise value has been reduced to 1.95 billion pounds to 2.05 billion pounds, inclusive of 0.1 billion pounds of IFRS-16 capitalised leases, from previously announced enterprise value of 2.2 billion pounds.

888 Holdings has entered into an agreement with Caesars Entertainment, Inc. to amend the terms. The amendments reflect the change in the macro-economic and regulatory environment since the announcement of the acquisition, as well as compliance factors impacting the WH business, including actions taken as part of an ongoing review by the Gambling Commission of Great Britain or UKGC.

In the amendment, cash consideration to be payable at closing has been reduced to 584.9 million pounds from 834.9 million pounds. The company also agreed to pay up to 100 million pounds in deferred consideration in 2024, conditional upon the Enlarged Group achieving a minimum level of Adjusted EBITDA for fiscal 2023.

The acquisition is expected to be immediately earnings enhancing to 888’s adjusted net earnings per share.

The company plans to publish the combined prospectus and circular in the coming weeks, with shareholder vote expected in May 2022 and completion of acquisition expected in June 2022.

Separately, 888 announced its intention to conduct a non-pre-emptive placing of up to 70.8 million new ordinary shares in the capital, representing approximately 19 percent of its issued ordinary share capital.

The Placing will be conducted through an accelerated bookbuild process, which will be launched immediately.

The company proposes to use the net proceeds of the Placing to partially finance the acquisition of William Hill.

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