Photograph: Mike Egerton/PA
Chairing a public company involves two essential skills. First, know when to change the chief executive. Second, don’t get fancy ideas about mergers if your shareholders won’t back them. Gareth Davis got a tick in the first box when he waved goodbye to James Henderson in July after online growth went soft. On the second front, however, he has suffered embarrassment.
Hedge fund Parvus, William Hill’s biggest shareholder, hated the idea of a £4.6bn “merger of equals” with Amaya, the Canadian owner of the PokerStars online poker website, and said so loudly. The bookie’s board then discovered little appetite among other big investors. Thus it has had to fold and abandon the talks – and maybe also reflect on the old poker saying that if you can’t see the sucker around the table, then it’s you.
Davis complained about his shareholders’ “lack of contemporary knowledge” about Amaya but that wasn’t entirely fair. Yes, Amaya and PokerStars have been enmeshed in the past in the confused and misguided stance taken by US authorities towards online gambling, especially poker. But one chief fault with the deal was bang up to date: Amaya would have brought too much debt.
There was an honest debate to be had about whether Amaya’s poker players could be prodded to bet on the horses and football with William Hill. Short answer: possibly, but the evidence is disputed. Thus the UK bookie left itself open to the charge it was indulging “debt, risk and hope”, the grounds on which it had previously said no to a three-way mash-up with 888 Holdings and Rank Group.
The flurry of proposals suggests there’ll be another one along soon. But the board can’t sit and wait. Davis must ensure William Hill is equipped for independence, which means appointing a permanent chief executive as soon as possible.
