Tweet
William Hill Floats $1.35 Billion
William Hill sets float price at $1.35 billion
May 29, 2002 Posted: 6:45 AM EDT (1045 GMT)
By David Jones
LONDON, May 29 (Reuters) - Britain's second-largest betting shop chain, William Hill, said on Wednesday next month's stock market debut would value it at around 920 million pounds ($1.35 billion), as it set out its stall to buy more bookmaker shops.
The company, which has more than 1,500 betting shops in Britain and also offers telephone and online betting, set its indicative price range between 190 and 240 pence a share for the June 17 flotation.
It reported strong interest from investors and hopes its June float will gain from the expected surge in gambling during the football World Cup.
"We have a track record of growth, and in addition we can see where the growth will come from in the future with industry deregulation, while we are also offering a good dividend yield,'' said Chief Executive David Harding in an interview.
The group's market capitalisation of 920 million pounds ($1.35 billion) at the mid-point of the price range gives it an enterprise value of about 1.43 billion pounds when including debt. It is to raise 340 million pounds of new money.
Harding will use the cash raised to buy up small independent bookmakers among Britain's 8,500 betting shops, and may include some shops from Britain's number three, Coral, if the private equity-controlled group is broken up, and also to cut debt.
The publication of the prospectus kicks off the share roadshow to institutional investors, with Harding reporting 40,000 registrations from its retail betting customers.
Grey Market
Spread-betting group Cantor indicated a unofficial price range in the grey market at the top of the range at 225-235p.
The launch comes at a tough time for flotation as retailer HMV Group priced its shares at the bottom end of its range in early May and they have fallen since, while Punch Taverns pulled its float to relist at a lower price.
Since then, quality controls firm Intertek Testing Systems last week restored confidence with its share rising after listing at the bottom of its price range. Oil industry services firm John Wood Group on Wednesday priced its shares just above mid-range and they rose strongly at the start of conditional trading.
Harding is targeting a dividend yield of 3.5-4 percent, and the group will pay an interim net cash dividend for the first half of 2002 in December of 2.9 pence per share.
He says the group has seen compound growth in earnings before interest and tax of 20 percent between 1999 and 2001 in a time of relatively low growth in the industry, and he now sees strong future growth from the abolition of UK betting tax last October and planned gambling industry deregulation.
Harding said profit before tax and interest rose 44 percent to 37.7 million pounds in the first quarter of 2002 due to favourable results at horse races, but second quarter margins have fallen to more normal levels due to less favourable results.
Private equity owners Cinven and CVC Capital Partners will see their 90 percent stake slip to 44 percent or 37 percent if investment bankers take up their option for 15 percent of the company. Senior managers who hold 10 percent will cut their
stake in half.
The company's previous owners, Japanese investment bank Nomura, scrapped plans to list at the last minute in 1999 in favour of a trade sale for 825 million pounds.
The share offer will close on June 14, and conditional trading will start on June 17 with full dealing on June 20.
Schroder Salomon Smith Barney is acting as global coordinator of the offer as well as joint bookrunner with Deutsche Bank, while ABM AMRO, Rothschild and Cazenove are co-lead managers of the offer.
May 29, 2002 Posted: 6:45 AM EDT (1045 GMT)
By David Jones
LONDON, May 29 (Reuters) - Britain's second-largest betting shop chain, William Hill, said on Wednesday next month's stock market debut would value it at around 920 million pounds ($1.35 billion), as it set out its stall to buy more bookmaker shops.
The company, which has more than 1,500 betting shops in Britain and also offers telephone and online betting, set its indicative price range between 190 and 240 pence a share for the June 17 flotation.
It reported strong interest from investors and hopes its June float will gain from the expected surge in gambling during the football World Cup.
"We have a track record of growth, and in addition we can see where the growth will come from in the future with industry deregulation, while we are also offering a good dividend yield,'' said Chief Executive David Harding in an interview.
The group's market capitalisation of 920 million pounds ($1.35 billion) at the mid-point of the price range gives it an enterprise value of about 1.43 billion pounds when including debt. It is to raise 340 million pounds of new money.
Harding will use the cash raised to buy up small independent bookmakers among Britain's 8,500 betting shops, and may include some shops from Britain's number three, Coral, if the private equity-controlled group is broken up, and also to cut debt.
The publication of the prospectus kicks off the share roadshow to institutional investors, with Harding reporting 40,000 registrations from its retail betting customers.
Grey Market
Spread-betting group Cantor indicated a unofficial price range in the grey market at the top of the range at 225-235p.
The launch comes at a tough time for flotation as retailer HMV Group priced its shares at the bottom end of its range in early May and they have fallen since, while Punch Taverns pulled its float to relist at a lower price.
Since then, quality controls firm Intertek Testing Systems last week restored confidence with its share rising after listing at the bottom of its price range. Oil industry services firm John Wood Group on Wednesday priced its shares just above mid-range and they rose strongly at the start of conditional trading.
Harding is targeting a dividend yield of 3.5-4 percent, and the group will pay an interim net cash dividend for the first half of 2002 in December of 2.9 pence per share.
He says the group has seen compound growth in earnings before interest and tax of 20 percent between 1999 and 2001 in a time of relatively low growth in the industry, and he now sees strong future growth from the abolition of UK betting tax last October and planned gambling industry deregulation.
Harding said profit before tax and interest rose 44 percent to 37.7 million pounds in the first quarter of 2002 due to favourable results at horse races, but second quarter margins have fallen to more normal levels due to less favourable results.
Private equity owners Cinven and CVC Capital Partners will see their 90 percent stake slip to 44 percent or 37 percent if investment bankers take up their option for 15 percent of the company. Senior managers who hold 10 percent will cut their
stake in half.
The company's previous owners, Japanese investment bank Nomura, scrapped plans to list at the last minute in 1999 in favour of a trade sale for 825 million pounds.
The share offer will close on June 14, and conditional trading will start on June 17 with full dealing on June 20.
Schroder Salomon Smith Barney is acting as global coordinator of the offer as well as joint bookrunner with Deutsche Bank, while ABM AMRO, Rothschild and Cazenove are co-lead managers of the offer.
Comment