Corporate By William Hill PLC

Refinancing Annoucement

THIS ANNOUNCEMENT (AND THE INFORMATION CONTAINED HEREIN) IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF THE INFORMATION IN THE PROSPECTUS TO BE PUBLISHED BY WILLIAM HILL PLC TODAY IN CONNECTION WITH THE RIGHTS ISSUE. COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM THE COMPANY'S REGISTERED OFFICE.

The Board of William Hill PLC (LSE: WMH) announces today that it has obtained commitments for New Bank Facilities that, together with its £250 million Existing Bank Facility, in aggregate, will provide funding of £838.5 million.

In addition, the Board announces that it proposes to raise approximately £350 million (net of expenses) by way of a fully underwritten 1 for 1 Rights Issue at a price of 105 pence per New Ordinary Share. The Rights Issue is subject to approval by Shareholders at a General Meeting to be held on 23 March 2009. 
The Rights Issue will result in the issue of 347,907,117 New Ordinary Shares (representing approximately 50 per cent. of the Enlarged Share Capital of William Hill).

William Hill PLC’s audited results for the 52 weeks ended 30 December 2008 have also been released today in the accompanying announcement.

Highlights

  • William Hill continues to show robust operational performance and strong cash flow generation from all of its businesses and to operate comfortably within its banking covenants
  • Previous bank facilities of £1.45 billion, with the majority maturing in March 2010
  • Funding requirement reduced to approximately £1.2 billion
  • New Bank Facilities obtained that, together with the Group's £250 million Existing Bank Facility, in aggregate, will provide funding of £838.5 million
  • Refinancing completed by fully underwritten Rights Issue to raise approximately £350 million (net of expenses) on the basis of 1 New Ordinary Share for every 1 Existing Ordinary Share at a price of 105 pence per New Ordinary Share
  • The decision to issue equity has been driven by the dramatic deterioration in credit markets since August 2007, which has resulted in banks seeking to reduce their overall lending to borrowers. This has not made it possible for William Hill to refinance the Group’s Existing Bank Facilities in full in the bank market
  • Net proceeds of the Rights Issue will be used to pay down borrowings and will therefore strengthen the Group’s balance sheet and improve the Group’s credit profile
  • The Rights Issue will result in the issue of up to 347,907,117 New Ordinary Shares at a price of 105 pence per New Ordinary Share (which represents a 57 per cent. discount to the closing middle market price per Ordinary Share on 26 February 2009, the last Business Day prior to the date of this announcement, and a discount of 40 per cent. to the theoretical ex-rights price on the same basis)
  • William Hill will not be paying a final 2008 dividend. Following the Rights Issue, the Board expects to adopt a dividend policy based initially on a dividend cover of 2.5 times underlying earnings, with the intention of moving towards 2.0 times dividend cover over time. The Board expects to pay an interim and final dividend for 2009 in line with this dividend policy. The dividend policy is aimed at ensuring that Shareholders continue to benefit from the successful growth and strong cash flows of the Group

Charles Scott, Chairman of William Hill, commented:

“Notwithstanding the deterioration in the economic environment, William Hill continues to show robust operational performance and strong cash flow generation from all its businesses and to operate comfortably within its banking covenants. Together, the Refinanced Bank Facilities and the proceeds from the fully underwritten Rights Issue will result in a significant decrease in the Group’s net debt with an improved facility maturity profile, and result in a strengthened balance sheet and improved credit ratios. The Board believes that, with the New Bank Facilities and Rights Issue, William Hill will have a robust capital structure and appropriate financial flexibility to enable the Group to continue to execute its growth strategy.”

A prospectus is being published by the Group today containing details of the Rights Issue. Shareholder approval for the resolution required to effect the Rights Issue will be sought at an Extraordinary General Meeting to be held at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA on 23 March 2009 at 10:30 a.m.

Application has been made to the UKLA for the New Ordinary Shares (nil paid and fully paid) to be admitted to the Official List and to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on its main market for listed securities. Subject to Shareholder approval, among other things, it is expected that Admission will become effective on 24 March 2009 and that dealings in the New Ordinary Shares, nil paid, will commence on the London Stock Exchange at 8:00am on that date. The expected latest time for acceptance and payment in full under the Rights Issue will be 11:00 a.m. on 7 April 2009. 

This summary should be read in conjunction with the full text of this announcement.

Analyst presentation

Meeting:
9:00 a.m.
Smeaton Vaults
The Brewery
Chiswell Street
London EC1

Live conference call:
UK Freephone: 
0800 634 5205
Local UK: 
+44 845 634 0041
International: 
+44 208 817 9301

Archive conference call:
UK dial-in: 
+44 207 769 6425
International dial-in: 
+44 207 769 6425
Passcode/security code:
1577020#
(available after the meeting until Friday, 6 March 2009)

Webcast:
www.williamhillplc.com
Available live and, until 27 February 2010, as an archive

Enquiries

William Hill PLC 
Ralph Topping, Chief Executive 
Simon Lane, Group Finance Director 
Lyndsay Wright, Head of Investor Relations

Today:        +44 (0) 20 7404 5959
Thereafter: +44 (0) 20 8918 3600

Citi (sole sponsor, sole bookrunner, financial adviser and corporate broker)
Jan Skarbek
Andrew Seaton 
Steve Salo

Telephone: +44 (0) 20 7986 4000

Brunswick
Fiona Antcliffe / Deborah Spencer

Telephone: +44 (0) 20 7404 5959

See Full Press release