British betting firm William Hill plc (LON:WMH) has offered to buy Swedish digital gaming company Mr Green & Co AB (MRG) for SEK 2.82bn (£241.8mln).
The cash offer of SEK 69 per share represents a 48.5% premium to MRG’s closing price of SEK 46.5 on Tuesday.
READ: William Hill becomes latest UK bookmaker to target the lucrative US market
William Hill chief executive Philip Bowcock said the proposed acquisition “accelerates the diversification” of the company, making it a more digital and international business.
MRG, whose brands include Mr Green and Redbet, has operations in 13 markets and holds remote gambling licences in Denmark, Italy, Latvia, Malta, Great Britain and Ireland. The business also expects to obtain Swedish licences by year-end.
“MRG will provide William Hill with an international hub in Malta with market entry expertise and strong growth momentum in a number of European countries,” Bowcock said.
"William Hill will move from a single brand to a suite of brands that can maximise growth opportunities moving forward in new and existing markets."
Based on its first-half results, William Hill expects the deal will raise its proportion of revenues from outside the UK to 21% from 14% and estimates online revenues will account for 47% of the total, up from 42% previously.
In the third quarter, MRG's geographic revenue mix was 40% in Western Europe, 36% in the Nordics, 21% in Central, Eastern and Southern Europe and 3% in other regions. It reported revenue growth of 51% for the quarter and 44% for the year to date.
UK exposure reducing
William Hill has been trying to reduce its exposure to the UK market by expanding its global presence. Last month it announced a tie-up with US casino operator Eldorado Resorts.
As part of the 25-year deal, William Hill will give Eldorado, which owns 21 properties across eleven states, US$50mln in shares plus a 20% stake in William Hill US.
In return, William Hill will open sportsbooks in Eldorado’s casinos, with five set to launch “within weeks”. Plans are also in place to build a website and app to capture the growing online audience.