Hedge fund Silchester International buys 5% stake in William Hill

Silchester International Investors, an investment management firm from London, has acquired a 5% stake in William Hill gambling provider. Currently, William Hill shares price is £239.9 in comparison to £465 price, which was 4 years ago.

As a result, Silchester has become the 4th major baker of the bookmaker that tries to better the profitability of William Hill during the last several years. Silchester is not a newcomer in the attempts of purchasing a struggling business. Previously, they bought a stake in Morrisons when the supermarket chain suffered not very easy time. The hedge fund is also making investment in Pearson publisher, when it also suffered from some troubles.

Silchester International Investors, founded by Stephen Butt, are concentrated on long-term stock increase in international revenue investment. They prefer long-term projects rather than short-term ones hoping to see rise in shares in the near future.

As to William Hills, they are trying to improve its financial state for the previous couple of years. Because of the rapid growth of great demand for igaming and betting on sports, the operator experienced some difficulties.

Just in spring 2017 William Hill suffered from the lower profit of £260-280 million from around £300 million due to the weaker performance of its igaming division and customer-friendly sports results. Philip Bowcock replaced the ex-CEO James Henderson.

The gambling operator even thought about the possible merger and acquisition deals to cope with the problems in this way. The Rank Group and 888 Holdings proposed a 3-way deal, but Will Hill refused it. There were some talks with The Stars Group in the end of 2016, but the main shareholders of William Hill also refused.

In an interview to The Times Mr. Browcock told, “Our company is now strong enough to continue by itself, despite its financial difficulties and the challenging regulatory environment gambling companies are forced to operate in. In other words, we will probably not engage in any merger and acquisition talks now and for now.”

As the latest report of William Hill states, their benefit decreased in 1% during the first half of 2017 to £129.5 million in total. However, William Hill explains that they show a great progress within the 6 months of 2017 thanks to the UK business improvement in retail and online spheres, and transformation of its divisions for better results.