(Bloomberg) -- Apollo Global Management (NYSE:APO) Inc. and Caesars (NASDAQ:CZR) Entertainment Inc. have approached U.K. gambling group William Hill (LON:WMH) about a potential takeover, the latest consolidation move in the betting industry.
William Hill has received separate cash proposals from the two groups, it said in a statement Friday after Bloomberg News reported on the Apollo approach. Talks are ongoing and there is no certainty that a formal offer will be made, William Hill said.
Shares of the bookmaker surged as much as 41% in London trading on Friday, an intraday record. The company now has a market value of about 3.2 billion pounds ($4 billion). Rival betting companies also rose, with Flutter Entertainment PLC (LON:FLTRF) gaining as much as 5.4% and GVC Holdings PLC (LON:GVC) advancing as much as 8.7%.
Apollo has a history of investments in the gambling sector. It teamed up with TPG for a 2008 leveraged buyout of Harrah’s Entertainment Inc., which was later renamed Caesars Entertainment. Last year, it also acquired a stake in Italy’s Gamenet Group SpA.
William Hill is already a partner of Caesars and the two are in discussions about merging some of the their operations in the U.S., a country where the U.K. company is looking to build scale. The British group recently completed its purchase of CG Technology, a sports-betting outfit spun off from Cantor Fitzgerald LP, in a deal that gave it sports book assets in Nevada.
“The U.S. is the key attraction with William Hill” and “a value of about 300p per share is easily reached at present,” Gavin Kelleher, an analyst at Goodbody Stockbrokers, wrote in a note to clients Friday. “Another interesting angle is the plans Apollo and/or Caesars have for the non-U.S. part of William Hill.”
Apollo made an initial written proposal on Aug. 27, and then both the buyout firm and Caesars made further approaches, William Hill said in Friday’s statement. Both suitors have until Oct. 23 to announce the intention to make a firm offer or walk away under U.K. takeover rules.
Founded in 1934, William Hill is one of the world’s largest sports betting companies with offices in 10 countries, according to its website. Under Chief Executive Officer Ulrik Bengtsson, who took over a year ago, the company is focused on building its online businesses. Bengtsson was previously William Hill’s chief digital officer.