Injunction Sought by William Hill to Counter Reported Merger Talks Between Playtech and Ladbrokes
LONDON, UNITED KINGDOM - Nothing wrong with protecting your interests especially if your business partner is in talks with a rival.
And that is what gaming firm William Hill has done, obtaining a court injunction against its own joint venture partner, Playtech, after news broke out that Playtech and rival Ladbrokes have entered into exploratory talks of a possible merger.
It may be recalled that in October 2008, William Hill and Playtech entered into a 5-year agreement wherein the former will be supplied with Playtech's online casino and poker turnkey solutions. Playtech has also taken on a 29% stake in William Hill Online.
Everything had been smooth-sailing so far with the British bookmaker even backing up Playtech despite the software supplier having a quarter of its stock market value wiped out following a profits warning in 2009.
However, earlier this month, as reported by The Daily Telegraph, Playtech received an invitation from rival Ladbrokes plc for a possible strategic tie-up, the successful result of which could be a US$ 3.56 billion merger.
William Hill's move for an injunction is a purely defensive one as according to eGaming Review, the threatened British bookmaker made the move "as a defensive measure to protect its rights."
A statement released by William said it had "secured an interim injunction against Playtech to ensure that its legal rights under the William Hill Online joint venture agreements are maintained."
The statement further said:
"Playtech recently initiated discussions with William Hill seeking possible significant amendments to the current William Hill Online joint venture agreements. There has also been press speculation regarding discussions between Playtech and Ladbrokes plc."
The eGR source noted that the injuction would prevent the software supplier from selling its software to Ladbrokes and would not allow for any restructuring of the joint venture agreement between Playtech and William Hill. The injunction would effectively curtail any possible partnership between Playtech and Ladbrokes.
William Hill will release its annual results on Friday and William Hill Online Chief Executive Henry Birch is expected to discuss the details of the injunction thereafter.
It is reported that Playtech is aware of the injunction but has made no comment.
Source: eGaming Review, The Daily Telegraph
Posted: February 23, 2011
