6th Oct 2020 20:09
(Alliance News) - Moody's Investors Service has on Tuesday placed William Hill PLC's ratings on review for downgrade, pending its acquisition by Caesars Entertainment Inc.
Ratings under review for a downgrade include the Ba3 corporate family rating and the Ba3 rating assigned to the company's senior unsecured GBP350 million senior unsecured notes due 2026 and the GBP350 million senior unsecured notes due 2023.
The outlook has also changed to ratings under review from negative, the ratings agency noted.
The placing of the ratings on review follows the announcement that William Hill and Caesars have agreed on the terms of a recommended GBP2.9 billion offer for the share capital of the UK bookmaker.
Caesars and William Hill currently operate a US joint venture with 20% and 80% ownership respectively, whereby William Hill runs online and retail sports betting operations through Caesars' and other properties in various states.
Moody's said the ratings action was prompted by the expected deterioration in William Hill's financial metrics as a result of Caesars' announcement. While the terms of the proposed transaction and details around financing structure were not disclosed, Moody's said Caesars' prospectus supplement indicates the proposed financing of USD5.46 billion including repayment of William Hill's existing debt and transaction fees.
Thus, the ratings agency said it expects a significant increase in William Hill's standalone debt from GBP905 million as of June 30.
Moody's noted that the review process will be focusing on pro forma capital structure, liquidity profile, expected use of free cash flow, and future operating strategy and financial policy, following closing of the transaction.
William Hill shares closed 0.8% higher at 281.30 pence each in London on Tuesday.
By Evelina Grecenko; [email protected]
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