William Hill expected to announce £350m rights issue
Bookmaker William Hill is this week expected to announce plans to raise about £350m (€390m) in a rights issue to refinance its debt.
Several companies have already tapped the market for fresh funding in recent weeks, including the big property firms British Land and Hammerson.
William Hill’s fundraising is part of a wider plan to restructure the group’s £1.2bn (€1.3bn) of borrowings, the Sunday Times said. The lending arrangement expires in March 2010, but the company’s banks, including Barclays, HSBC and Royal Bank of Scotland, are expected to agree a new facility.
The rights issue is due to be unveiled on Friday alongside the company’s full-year results, which are likely to show profits of around £210m (€234m). The company has 2,300 shops in the UK and Ireland.
A major shareholder told the newspaper that it was in favour of the £350m (€390m) cash call, even though William Hill may scrap its dividend.
The investor said: “William Hill is a good business. A rights issue at that sort of level should be quite well received. We would be supportive of it.”
The rights issues done to date have been seized upon by investors, who have been happy to provide funding to help strong businesses through the economic slump.
William Hill investors will also have been reassured by a strong set of results from rival Ladbrokes last week. It offered no sign that the recession and rising levels of unemployment were having a major impact on its business.
