LONDON--(BUSINESS WIRE)--HBK Europe Management LLP, on 18 March 2021, sent the below letter to William Hill’s shareholders and stakeholders regarding the company’s upcoming Scheme Court Hearing.
We are writing to you today regarding William Hill’s upcoming Scheme Court Hearing, which has been scheduled for 31 March 2021, at which a UK court will be asked to sanction the scheme of arrangement which effects the acquisition of William Hill by Caesars UK Bidco. You may have seen from William Hill’s announcement on 18 March 2021 that we have informed William Hill that we intend to contest the Scheme.
Our opposition is based upon our strongly held belief that shareholders voting on the Scheme did so without information which would have allowed them to weigh up its true merits. In particular, it is our view that the terms of the joint venture agreement entered into between William Hill and Eldorado (now Caesars) dated 6 September 2018 were not adequately disclosed by William Hill.
You will recall that Caesars served on William Hill a notice of the addition of Apollo Global Management, Inc. and its affiliates to a list of “Restricted Acquirers” under the terms of the joint venture agreement. We consider that the disclosure contained in the Scheme Document as to the Restricted Acquirers list led the market to believe that no rival bid for William Hill would ever be possible, because Caesars could promptly add any rival bidder to the list of Restricted Acquirers.
HBK discovered that, in reality, Caesars’ ability to restrict counterbidders is significantly more limited than this. On 19 November 2020, at the EGM/Court Meeting, William Hill disclosed, after being questioned by HBK at the meeting, that “there can be a maximum of six names on this list. Caesars are entitled to substitute one name every six months.”
HBK believes that this information is highly relevant to shareholders and should have been disclosed in the Scheme Document. Where the terms of a contract between two parties is weaponized during the M&A process in a way which impacts the competitive nature of that process, shareholders need to be made fully aware of all the relevant terms. The UK market strongly benefits from its reputation as a shareholder-friendly jurisdiction, governed by both the Companies Act and The Takeover Code. It is a rare occurrence indeed to see a “poison-pill” actually being utilised against a UK company. As such, UK shareholders, who are unaccustomed to such mechanisms, deserved and required a fuller explanation of the Restricted Acquirers list and its limitations in order to properly assess how to vote.
We believe it is our duty as a minority shareholder to inform the Court, and William Hill, of these concerns. We have engaged constructively with the Board on this matter both before and after the Court Meeting. It is our opinion that the Scheme should only be sanctioned if Scheme Shareholders vote again in light of proper disclosure of the 6-month rule.
HBK urges fellow shareholders and stakeholders to write to the Court and William Hill if you believe that this information should have been disclosed, or could have influenced your voting decision. You are also welcome to provide a copy of such letter to our lawyers at WilliamHill@traverssmith.com.
- Did you ask William Hill or their advisers for more information regarding the Restricted Acquirers list or the JVA without success before the Court Meeting?
- Do you believe that shareholders should be fully apprised of the details of any potential “poison-pill” before being asked to value and approve the sale of the business?
- Do you believe that the Board should have provided fuller details of the Restricted Acquirers list, and any other relevant JV terms, given that Caesars used this JV during the Offer Period as a poison-pill against Apollo?
We welcome any shareholder feedback on these points, and we encourage shareholders to get in contact with William Hill and the Court before 31 March 2021 to share their views on this subject.
Notes to editors:
HBK is the largest economic interest holder in William Hill, with a 9.5% economic interest in the company.