European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

British bookmaker <a href="https://www.smartkarma.com/entities/william-hill-plc" target="_blank" data-smartkarma-citation="entities:22210:1" rel="noopener">William Hill (WMH LN)</a><a href="https://www.williamhillplc.com/investors-centre/regulatory-news/item?rnsid=3819908" target="_blank" rel="noopener">confirmed on 25 September </a>that it has received separate cash proposals from <a href="https://www.smartkarma.com/entities/apollo-global-management-inc" target="_blank" data-smartkarma-citation="entities:28770:1" rel="noopener">Apollo Global Management Inc (APO US)</a> ("Apollo") and <a href="https://www.smartkarma.com/entities/caesars-entertainment-corp" target="_blank" data-smartkarma-citation="entities:15532:1" rel="noopener">Caesars Entertainment (CZR US)</a> ("Caesars").
Apollo submitted its first takeover offer on Aug. 27, then upgraded it, while Caesars joined the bidding for a company that has been hit hard by the coronavirus.
Today, press reports that Caesars in is advanced talks on a £2.9 bn takeover bid, at £272p per share, which would value the equity of William Hill at 2,855 mn. The shares of William Hill have adjusted downwards and at 15.30 (GMT) were trading at 275, above the indicated level for Caesar's prospective offer.
Caesars is undertaking an equity capital raising (30 mn shares, at $57.07 the closing price of Friday, could raise $1.7bn) with the aim of using its proceeds, together with existing cash and $2 billion (£1.6 billion) of new non-recourse debt facilities to fund the offer. The transaction would be subject to approval of William Hill shareholders and customary antitrust and regulatory gaming approvals. Caesars expects that the transaction would close in the second half of 2021.
I estimate that a private equity buyer could pay 300p per share (10% premium to Caesar's offer) and achieve an IRR of 20.3% between years 7 and 8. Apollo would seek to launch a friendly offer.
I believe that the first move by Caesars makes it more difficult for Apollo to present an offer and enter into a bidding war for William Hill, but this should not be ruled out.
Recommendation is LONG William Hill. There may be further upside from an Apollo offer.

British bookmaker William Hill (WMH LN)confirmed on 25 September that it has received separate cash proposals from Apollo Global Management Inc (APO US) ("Apollo") and Caesars Entertainment (CZR US) ("Caesars").
Apollo submitted its first takeover offer on Aug. 27, then upgraded it, while Caesars joined the bidding for a company that has been hit hard by the coronavirus.
Today, press reports that Caesars in is advanced talks on a £2.9 bn takeover bid, at £272p per share, which would value the equity of William Hill at 2,855 mn. The shares of William Hill have adjusted downwards and at 15.30 (GMT) were trading at 275, above the indicated level for Caesar's prospective offer.
Caesars is undertaking an equity capital raising (30 mn shares, at $57.07 the closing price of Friday, could raise $1.7bn) with the aim of using its proceeds, together with existing cash and $2 billion (£1.6 billion) of new non-recourse debt facilities to fund the offer. The transaction would be subject to approval of William Hill shareholders and customary antitrust and regulatory gaming approvals. Caesars expects that the transaction would close in the second half of 2021.
I estimate that a private equity buyer could pay 300p per share (10% premium to Caesar's offer) and achieve an IRR of 20.3% between years 7 and 8. Apollo would seek to launch a friendly offer.
I believe that the first move by Caesars makes it more difficult for Apollo to present an offer and enter into a bidding war for William Hill, but this should not be ruled out.
Recommendation is LONG William Hill. There may be further upside from an Apollo offer.

William Hill - Caesars: Entertainment Prospective Bid

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

On 22nd May 2020, South Downs Investment LP (backed by alternative investment manager <a href="https://www.smartkarma.com/entities/apollo-global-management-inc" target="_blank" data-smartkarma-citation="entities:28770:1" rel="noopener">Apollo Global Management Inc (APO US)</a>) agreed to acquire South Africa-listed UK-REIT <a href="https://www.smartkarma.com/entities/atlantic-leaf-properties" target="_blank" data-smartkarma-citation="entities:28971:1" rel="noopener">Atlantic Leaf Properties (ALP SJ)</a> in a deal that valued the target at a market cap of GBP152mn. The deal will be executed through a Scheme of Arrangement involving an all-cash consideration. The Scheme Consideration will be GBP0.805 per share (fixed in GBP). Target shareholders registered on the South African share register at the Scheme Record Time will receive the Scheme Consideration in ZAR (at the latest spot closing mid-point rate between ZAR and GBP on the Effective Date). On the other hand, Scheme Shareholders registered on the Mauritian share register will receive the Scheme Consideration in GBP.The deal is conditional on receiving target shareholder approval and is expected to close in early-August 2020. At the time of writing, shares of Atlantic Leaf are trading at ZAR16.25 (~GBP0.757) translating to a gross spread of ~6.3% with a little over 2 months to the anticipated closing date. As usual, there is more below the fold.

On 22nd May 2020, South Downs Investment LP (backed by alternative investment manager Apollo Global Management Inc (APO US)) agreed to acquire South Africa-listed UK-REIT Atlantic Leaf Properties (ALP SJ) in a deal that valued the target at a market cap of GBP152mn. The deal will be executed through a Scheme of Arrangement involving an all-cash consideration. The Scheme Consideration will be GBP0.805 per share (fixed in GBP). Target shareholders registered on the South African share register at the Scheme Record Time will receive the Scheme Consideration in ZAR (at the latest spot closing mid-point rate between ZAR and GBP on the Effective Date). On the other hand, Scheme Shareholders registered on the Mauritian share register will receive the Scheme Consideration in GBP.The deal is conditional on receiving target shareholder approval and is expected to close in early-August 2020. At the time of writing, shares of Atlantic Leaf are trading at ZAR16.25 (~GBP0.757) translating to a gross spread of ~6.3% with a little over 2 months to the anticipated closing date. As usual, there is more below the fold. 

Atlantic Leaf: Apollo's Rescue Offer for Vukile, Trading Wide

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

<ul>
<li>
Increasing Systemic Risks:Events are moving quickly and the fluidity of this pandemic has created a destructive amount of market volatility, which likely is the new normal given issues Quant Funds, illiquidity, the lack of US preparation and global leadership, and the corporate bond market are all becoming systemic risks.</li>
<li> Global Recession Already Underway: A global recession is already well underway, which should worsen given how much this pandemic is having on consumer confidence.  </li>
<li>Financial Stability Called Into Question:The global market rout is calling financial stability into question. This crisis of confidence and increased likelihood of waterfall of losses that will make for a VERY toxic cocktail – especially considering that many names are still not profitable on an operating basis.   </li>
</ul>



Increasing Systemic Risks:Events are moving quickly and the fluidity of this pandemic has created a destructive amount of market volatility, which likely is the new normal given issues Quant Funds, illiquidity, the lack of US preparation and global leadership, and the corporate bond market are all becoming systemic risks.
 Global Recession Already Underway: A global recession is already well underway, which should worsen given how much this pandemic is having on consumer confidence.  
Financial Stability Called Into Question:The global market rout is calling financial stability into question. This crisis of confidence and increased likelihood of waterfall of losses that will make for a VERY toxic cocktail – especially considering that many names are still not profitable on an operating basis.   


United States

Apollo Global Management, Inc. operates as an alternative investment management company. The Company focuses on investing in yield, hybrid, and equity markets to generate retirement and investment income for clients. Apollo Global Management serves businesses and individuals worldwide.

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Apollo Global Management (APO US)

William Hill - Caesars: Entertainment Prospective Bid

Apollo and Caesars Entertainment present separate bids for the British bookmaker William Hill.

Jesus Rodriguez Aguilar

Atlantic Leaf: Apollo's Rescue Offer for Vukile, Trading Wide

On 22nd May 2020, South Downs Investment LP (backed by alternative investment manager Apollo Global Management Inc (APO US)) agreed to acquire...

Janaghan Jeyakumar, CFA

Toxic Cocktail

Increasing Systemic Risks:Events are moving quickly and the fluidity of this pandemic has created a destructive amount of market volatility,...

Thomas J. Monaco

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