TIDM888
RNS Number : 1145G
888 Holdings plc
14 July 2023
14 July 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY OTHER
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
888 Holdings Plc
("888" or "the Group")
Termination of Discussions with FS Gaming
Further to its major shareholder notification on 6 June 2023, FS
Gaming Investments LLC ("FS Gaming") subsequently presented a
proposal ("Proposal") to the Board of 888 (the "Board"). The Board
has thoroughly reviewed the Proposal, which centred on the
appointments of Lee Feldman, Kenny Alexander and Stephen Morana to
become Chair, CEO and CFO of 888, respectively. All the proposed
appointees previously held senior leadership positions at GVC
Holdings Plc ("GVC") (now Entain plc).
On 31 May 2023, Entain plc ("Entain") announced it had entered
deferred prosecution agreement negotiations with the Crown
Prosecution Service in relation to the ongoing HMRC investigation
into offences that include, but are not limited to, section 7 of
the Bribery Act 2010. Entain noted that the ongoing investigation
includes a review of its former Turkish facing business and that
the company acknowledged that historical misconduct involving
former third party suppliers and former employees may have
occurred. In considering the Proposal, the Board examined all
potential risks related to this, including reviewing information
from historic discussions between William Hill and GVC.
The Group has been in communication with the GB Gambling
Commission ("GBGC") in relation to FS Gaming's shareholding and the
Proposal. The GBGC has expressed its concern regarding the ongoing
HMRC investigation into GVC's activities covering the time the
individuals proposed to the Board by FS Gaming were in senior
leadership positions at GVC, and that it is in close dialogue with
HMRC regarding its ongoing investigation. The GBGC requested
regular updates from 888 in relation to any new developments in the
circumstances around FS Gaming and its Proposal so that it can
fully execute its responsibilities as the GB regulator.
The Group requested clarification from FS Gaming in relation to
considerations expressed by the GBGC, but the most basic assurances
that addressed these concerns were not forthcoming. Based on the
information received in relation to these matters, the GBGC
informed the Group on 14 July 2023 that it has decided it needs to
commence a review of the Group's operating licences under Section
116 (2)(c)(ii) of the Gambling Act 2005. The GBGC confirmed it has
determined a licence review is appropriate in light of FS Group's
investment in the Group and the Proposal.
The Group will co-operate fully with the GBGC in its licence
review. The GBGC has confirmed that a licence review allows for a
range of outcomes, including immediate suspension, revocation of
operating licences, or the imposition of licence conditions or
financial penalties if the Commission finds that licence conditions
have been breached, or that the operator, or relevant persons
connected to the operator, are unsuitable.
As a result of the initiation of the licence review by the GBGC,
and in conjunction with publicly available information, and the
Board's due diligence, the Board concluded that the appointments
proposed by FS Gaming have no reasonable prospect of being approved
by the GBGC at this time and any actions by FS Gaming to effect a
change of corporate control would likely put the Group's licences
to operate in the UK at immediate and significant risk. Therefore,
the Board has unanimously concluded to terminate discussions.
As part of its ongoing advice, the GBGC confirmed in writing to
the Board its key responsibilities and considerations as the
regulator of Great Britain. It has also made clear that relevant
shareholders should also be cognisant of these considerations:
-- Any shareholder acquiring a stake of more than 10% in the
business triggers a change of corporate control. The GBGC is
required to approve such a change of control or reject it, and if
it rejects the application, the only course of action is to revoke
the licence to operate. Furthermore, once a change takes place it
cannot be reversed;
-- The GBGC was clear that it is incumbent on any licensee
appointing a new person into a position of influence and control to
ensure those persons are suitable, as the Commission's licensing
assessment will be thorough and exhaustive;
-- The GBGC affirmed that only suitable applicants will be
granted personal licences, and it considers that the existence of
an ongoing criminal investigation would be an important factor in
considering suitability;
-- Furthermore, the GBGC confirmed that it is not required to
await the conclusion of any legal proceedings before acting in
regard to refusing personal licences or suspending or revoking
operating licences;
-- The GBGC also informed the Board that any licence applicant,
or operator relevant to such application, should consider what role
relevant individuals may have had at the time relevant to the
ongoing HMRC investigation into GVC ;
-- The GBGC affirmed to the Board that it rejects a number of
personal licence applications every year, the main grounds often
being suitability; and
-- The GBGC strongly recommended that the Board, as well as all
shareholders, give very serious consideration to the above factors
before acting.
Lord Mendelsohn, Executive Chair of 888, commented:
"We will be fully cooperating with the GBGC's Section 116
(2)(c)(ii) review, arising from potential issues with respect to FS
Gaming's investment and Proposal, and look forward to bringing the
review to a conclusion expeditiously.
As a Board we devoted significant time to considering FS
Gaming's Proposal. However, following in-depth regulatory due
diligence including engaging closely with the GBGC, the Board had
no option but to terminate discussions as it simply could not put
licences in our largest market at significant risk.
While this engagement temporarily interrupted the very thorough
search process to appoint a new CEO, the Board is finalising its
appointment and expects to make an announcement in the very near
future. The Board remains firmly focused on delivering the Group's
clear strategy to unlock shareholder value and I'm pleased to
confirm that the business remains on track to deliver market
expectations for 2023 Adjusted EBITDA."
Enquiries and further information:
888 Holdings Plc +44(0) 800 029 3050
Lord Mendelsohn, Executive Chair
Yariv Dafna, Chief Financial Officer
Vaughan Lewis, Chief Strategy Officer
Investor Relations
James Finney, Director of IR ir@888holdings.com
Media 888williamhill@hudsonsandler.com
Hudson Sandler
Alex Brennan / Michael Sandler +44(0) 207 796 4133
About 888 Holdings Plc:
888 Holdings plc (and together with its subsidiaries, "888" or
the "Group") is one of the world's leading betting and gaming
companies. The Group owns and operates internationally renowned
brands including William Hill, 888, and Mr Green. In addition, the
Group operates the SI Sportsbook and SI Casino brands in the US in
partnership with Authentic Brands Group.
Incorporated in Gibraltar, and headquartered and listed in
London, the Group operates from offices around the world and
employs over 11,000 people globally.
The Group's mission is to lead the gambling world in creating
the best betting and gaming experiences, bringing unrivalled
moments of excitement to people's day-to-day lives. It achieves
this by developing state-of-the-art technology and content-rich
products that provide fun, fair, and safe betting and gaming
entertainment to customers worldwide.
Find out more at:
http://corporate.888.com/
Important Notices
This announcement may contain certain forward-looking
statements, beliefs or opinions, with respect to the financial
condition, results of operations and business of 888. These
statements, which contain the words "anticipate", "believe",
"intend", "estimate", "expect", "may", "will", "seek", "continue",
"aim", "target", "projected", "plan", "goal", "achieve", words of
similar meaning or other forward looking statements, reflect 888's
beliefs and expectations and are based on numerous assumptions
regarding 888's present and future business strategies and the
environment 888 will operate in and are subject to risks and
uncertainties that may cause actual results to differ materially.
No representation is made that any of these statements or forecasts
will come to pass or that any forecast results will be achieved.
Forward-looking statements involve inherent known and unknown
risks, uncertainties and contingencies because they relate to
events and depend on circumstances that may or may not occur in the
future and may cause the actual results, performance or
achievements of 888 to be materially different from those expressed
or implied by such forward looking statements. Many of these risks
and uncertainties relate to factors that are beyond 888's ability
to control or estimate precisely, such as future market conditions,
currency fluctuations, the behaviour of other market participants,
the actions of regulators and other factors such as 888's ability
to continue to obtain financing to meet its liquidity needs,
changes in the political, social and regulatory framework in which
888 operates or in economic or technological trends or conditions.
Past performance of 888 cannot be relied on as a guide to future
performance. As a result, you are cautioned not to place undue
reliance on such forward-looking statements. The list above is not
exhaustive and there are other factors that may cause 888's actual
results to differ materially from the forward-looking statements
contained in this announcement. Forward-looking statements speak
only as of their
date and 888, its respective parent and subsidiary undertakings,
the subsidiary undertakings of such parent undertakings, and any of
such person's respective directors, officers, employees, agents,
affiliates or advisers expressly disclaim any obligation to
supplement, amend, update or revise any of the forward-looking
statements made herein, except where it would be required to do so
under applicable law. No statement in this announcement is intended
as a profit forecast or a profit estimate and no statement in this
announcement should be interpreted to mean that the financial
performance of 888 for the current or future financial years would
necessarily match or exceed the historical published for 888.
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