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There’s a familiar feeling around Evoke right now. Pressure has been building for a while, and now it’s out in the open. The company has confirmed it’s in talks with Bally’s about a possible takeover.
Nothing is agreed yet. But the idea on the table is an offer of around 50p per share, which would value the business at roughly £225 million.
At first glance, that might not sound too bad. It’s above where the shares have been trading. But step back a bit, and it tells a different story. This is a company that was once worth far more, now being discussed at a fraction of that value.
How it got here
To understand why this is happening, you have to go back a few years.
In 2022, when the business was still known as 888 Holdings, it made a bold move by buying William Hill’s retail betting arm for £2.2 billion. The plan was simple enough. Combine a big high street presence with a strong online operation and build something bigger.
It hasn’t worked out that way.
Since then, the share price has dropped heavily, and the company is now carrying around £1.8 billion in debt. That’s a huge number when you compare it to where the business is valued today.
Put simply, the balance sheet looks stretched, and that tends to attract interest from buyers.
Why Bally’s is interested
For Bally’s, this could be an opportunity.
The group, which is now owned by Intralot, has been looking to grow beyond the US. Picking up Evoke would instantly give it a foothold in the UK market, along with brands that are already well known.
But it’s not a clean, easy acquisition. Bally’s would also be taking on the challenges that come with the business.
The problems haven’t gone away
Evoke’s issues aren’t just about debt.
Costs have been rising, especially after changes to gambling taxes in the UK. The company has said those increases could cost it up to £135 million a year. That’s a big hit, and it’s already forcing tough decisions.
One of those decisions is the planned closure of around 200 William Hill shops.
On top of that, there have been a number of regulatory and internal problems over the past few years. Fines, compliance issues, and leadership changes have all added to the sense that the business has been on the back foot.
None of this makes a takeover impossible, but it does make it more complicated.
What happens next
Evoke has been reviewing its options for a while, working with advisers like Morgan Stanley and Rothschild.
The talks with Bally’s are the first real sign that something might actually happen.
There’s a deadline in place, with Bally’s needing to decide by mid-May whether to make a firm offer or walk away. Until then, it’s a waiting game.
If a deal does go through, it would mark a major shift for Evoke after a difficult few years. If it doesn’t, the company is still left dealing with the same problems that brought it to this point in the first place.
Either way, this feels like an important moment. Not just for Evoke, but for how these kinds of gambling businesses are valued when growth plans don’t go to plan.
Source: theguardian.com
