The operating company of William Hill, 888 and Mr Green could be sold as its debts continue to pile up.
Evoke are thought to be considering breaking up their operation and selling off individual units; and it’s also been suggested that they could contemplate a complete sale to outside investors.
The value of Evoke has tumbled 90% since it acquired William Hill’s betting shops in 2021, with considerable debt taken on to facilitate the deal.
And that position, allied to the gambling tax hikes announced in the UK’s autumn budget, have left the William Hill owner in dire straits.
Shutting Up Shop
When American firm Caesars Entertainment acquired William Hill in April 2021, they decided that they didn’t want to take on the brand’s retail empire.
So there was a fear that one of the longest standing firms in domestic betting would be lost from the UK high street forever, however Evoke – the new trading name of 888 Holdings – stepped into the breach with a £2.2 billion deal.
Evoke got the William Hill name and some 1,400 betting shops, but they were also saddled with an almighty debt load.
It was their first foray into retail betting, but things have not gone smoothly amidst tough trading conditions, and Evoke’s market value has plummeted by a staggering 90% since. Their net debt position is thought to be around £1.8 billion.
In January, their shares were trading at £73.90 a go. This week, that stock value had fallen to just £21.85.
Matters were made all the more challenging in November, when the chancellor Rachel Reeves announced her tax raid on the gambling industry. Although retail betting shops were exempt from the tax hikes, other arms of the Evoke business model were badly hit – they have claimed they will pay an extra £136 million a year in tax from 2026.
Prior to the budget announcement, Evoke had warned that if tax levels were increased, they would be forced to close around 200 of their betting shops – causing the loss of around 1,500 jobs.
When it came to pass, Evoke chief executive Per Widerstrom described the tax grab as ‘ill-thought through, counter-productive and highly damaging.’ His company, like others, are now facing the consequences.
A Tough Sell
Earlier this week, Evoke chiefs confirmed their position in an update to shareholders.
They revealed that they had decided to ‘undertake a review of the company’s strategic options, which will include the consideration of a range of potential alternatives to maximise shareholder value.’
Amongst that selection of potential alternatives mooted include the sale of the company’s assets or business units – meaning William Hill, 888 or Mr Green – or Evoke in its entirety.
To facilitate that strategic overview, bosses had instructed bankers at Morgan Stanley and Rothschild to explore possible options – namely, to sound out any interested parties.
However, even Evoke themselves have cast a doubt on whether that is likely.
“Shareholders are advised that there is no certainty that any transaction will materialise, nor as to the terms of any transaction,” they warned in a statement.
Whether a buyer with the necessary cashflow can be found remains to be seen. And will there be interest from overseas in investing in the UK gambling sector, which now has one of the most prohibitive tax regimes on the planet?
The Likely Bidders
An alternative may be that one of the giants of the UK sector, such as Flutter or Entain, may look to acquire the rights to the William Hill brand and its existing customer base, although any such takeover may struggle to pass the scrutiny of the Competition and Markets Authority (CMA).
It’s even possible that Evoke’s bondholders, seeing no viable way out of the firm’s debt position, may decide to take control of the company in order to sell of its assets at a hugely reduced price.
Evoke haven’t always helped themselves, having been fined £7.8 million in 2017 and £9.4 million five years later by the Gambling Commission – hardly helping their financial situation.
Those sanctions came in the wake of a series of serious licensing breaches, which included allowing 7,000 customers who had excluded themselves from betting to readily access their accounts. They also failed to uphold responsible gambling initiatives.
In 2023, Evoke was the subject of a takeover bid from a consortium of buyers that included former Entain chief Kenny Alexander.
However, that fell foul as accusations and recriminations flew from both sides; Alexander has since been charged with conspiracy to bribe and defraud, and will face a high court date in 2028.