The 88 (LON:88) share price sharply rose on Wednesday, reacting to investors’ concerns about the recent deal by Ceasars on its William Hill’s stake. It rose by 26%, moving around its highest level in February 2022.
Caesars’ William Hill stake
Caesars Entertainment is a huge American casino company that runs several brands like Caesars, Harrahs, Eldorado, and Horseshoe. The firm makes over $10 billion in yearly revenue and has a market cap of over $15 billion.
Similar to most American casino companies, Ceasars has grown its digital services as most states make most states authorize the practice. One of their approaches is to acquire stable brands to compete.
For these reasons, Ceasars revealed its William Hill acquisition, a British Company for 2.9 billion pounds. The company opted to sell the non-UK business to 888 holdings in a 2.2 billion pound deal as part of the acquisition deal.
On the other hand, 888 runs various sports betting, online casino, and poker ventures. It owns 888Poker, 888Casino, 888Sport, and 888Bingo.
The 888 share price hiked after Ceasar decided to reduce the money it sought from William Hill Stake. It decided to sell the business for between 1.95 and 2.05 billion pounds. That means 888 got a 250 million pounds discount. Concurrently, Caesars will be entitled to a 100 million pounds deferred consideration.
Therefore, the 888 share price rises as investors anticipate a special dividend or share repurchases from these savings.
Hence, the 888 share price increases with investors awaiting a special dividend or share repurchases from the savings.
88 share price forecast
The 88 stock price has been in a deep downward trend in the past few months as growth in the sector slows. It has fallen by more than 50% from its highest level in 2021, similar to popular gambling stocks like Entain and Flutter Entertainment. It has bounced back and is approaching the key resistance level at 278p, which was the lowest level in February last year. Still, the downward trend will likely resume in the coming days as the hype ends.