FT Lex
William Hill’s owner can squeeze extra winnings from its suitor
Most Important Insight
Evoke's high debt-to-equity ratio means that even a marginal increase in the total enterprise value offered by Bally’s Intralot would result in a disproportionately large percentage gain for equity shareholders.
Most Original Insight
The 50p per share bid is highly opportunistic, timed precisely to exploit the immediate valuation collapse caused by the UK's doubling of remote gaming taxes to 40% in April 2026.
Key Points
- Bally’s Intralot has proposed a 50p per share takeover bid for Evoke, valuing the equity at approximately £225mn.
- The total enterprise value of the deal is estimated at £2bn, reflecting the massive debt load carried by Evoke.
- UK remote gaming taxes increased from 21% to 40% in April 2026, creating a projected £135mn annual headwind for the company by 2027.
- Bally’s Intralot operates with a 33% EBITDA margin, which is nearly double the current margin of Evoke.
- A 20% reduction in Evoke’s £250mn SG&A expenses could potentially increase the acquisition's return on investment from 9% to 12%.
- Evoke's current interest payments consume roughly 50% of its forecast £350mn EBITDA, limiting its independent strategic options.
- Additional tax increases targeting online sports betting are scheduled to take effect in 2027.
- Evoke shares rose to 41p on April 20, 2026, following the news of the 50p bid, up from a low of 22p in December 2025.
Investment Implications
| Asset / Sector / Instrument | Action | Source | Notes |
|---|---|---|---|
| Bally’s Intralot | BUY | implicit | The suitor could see significant margin expansion if it successfully applies its 33% EBITDA margin efficiency to Evoke's assets. |
| Evoke (EVK:LN) | HOLD | implicit | The author suggests Evoke can push for more generous terms than 50p given the potential for massive cost synergies. |
| UK Gambling Sector | SELL | implicit | The industry is facing a severe tax raid with remote gaming taxes hitting 40% in April 2026 and more hikes coming in 2027. |
Hang on a sec…
- The claim of 'massive synergies' ignores the historical difficulty of integrating disparate technology platforms and navigating varying local gambling regulations.
- The assumption that a buyer can easily slash 20% of SG&A is questionable given that Evoke has already been in a strategic review for four months.
- The 12% ROI projection is highly dependent on 2027 profit forecasts that may not fully account for the long-term impact of the 40% tax regime on player behavior.