October 31, 2018 / 7:18 AM / 16 days ago

William Hill offers to buy Sweden's Mr Green & Co for $308 million.

(Reuters) - William Hill Plc (WMH.L) has offered to buy Swedish-listed Mr Green & Co AB (MRG) (MRG.ST) for around $308 million (242 million pounds) as the British gambling company expands its digital businesses and strengthens its European operations ahead of Brexit.

FILE PHOTO: A pedestrian walks past a William Hill betting shop in London, Britain July 25, 2016. REUTERS/Neil Hall/File Photo

The deal would combine William Hill with MRG’s Mr Green and Redbet brands and reduce the London-based company’s reliance on Britain as regulations are tightened in its home market.

William Hill shares rose more than 8 percent by 0930 GMT on the back of a deal that comes after European gambling companies had been looking to expand across the Atlantic as U.S. states ease curbs on betting.

MRG shares soared 47 percent to 68.40 Swedish crowns, close to the offer price of 69 crowns. The company operates in 13 markets and has an international hub in European Union member Malta, an added incentive as Britain prepares to leave the EU.

“We get a ready to go international hub,” Philip Bowcock, William Hill’s chief executive officer told Reuters

“As a part of Brexit, we have to create an international hub outside of Gibraltar operations.” The British Overseas Territory of Gibraltar has like Malta become an important centre for online gambling.

Gambling companies have expanded in the internet age but their online and more traditional operations have attracted closer scrutiny from the British authorities.

In this week’s budget, British Finance Minister Philip Hammond said remote gaming duty — tax on betting via offshore sites — would increase to 21 percent from 15 percent.

William Hill’s familiar chain of high street betting shops also faces pressure from a cut in the maximum stakes on fixed-odd betting terminals from October next year.

Mr Green holds remote gambling licences in Denmark, Italy, Latvia, Malta, Britain and Ireland and expects to obtain Swedish licences by the end of the year.

The company, which was founded in 2007 after its entrepreneurs created the character Mr Green and developed the casino site, currently operates in 13 countries.

William Hill offered a near 49 percent premium to MRG’s closing price of 46.5 Swedish crowns on Tuesday. The deal has been recommended for approval by Mr Green & Co’s board and shareholders who own over 40 percent of MRG accepted the offer.

Mr Green & Co reported strong results for the third quarter, with revenue increasing nearly 51 percent.

Reporting by Sangameswaran S in Bengaluru; Editing by Bernard Orr/Keith Weir

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