William Hill has agreed to buy Stanley Leisure's betting shops for £504 million to become Britain's biggest bookmaker, the two companies said today.
The deal covers 624 betting offices in Britain, Ireland, the Isle of Man and Jersey and takes William Hill ahead of previous market leader, Hilton Group's Ladbrokes.
William Hill said that due to the deal it was scrapping plans to return £453 million to shareholders, and it issued a downbeat trading update,
The news knocked its shares, which this morning were down 1.5 per cent at 517 pence, the second-biggest fall on the FTSE-100 index of blue-chip UK companies.
Shares in Stanley Leisure, Britain's biggest casino operator, were up 1.9 per cent, however, at 532 pence after the group said it would likely return about £300 million to shareholders.
"Stanley shareholders are getting the better deal," analyst Greg Feehely at Altium Securities said. "The price is mind-boggling - 13.5 times historic EBITDA [earnings before interest, tax depreciation and amortisation]."
Stanley Chief Executive Bob Wiper said the group would retain and develop its international betting shops but could sell its online betting operations following the deal.