How Tax Policy Turned a £2.2bn Acquirer Into a £243m Target

Deal terms and financing structure

The board of Bally's Intralot, the combined entity formed after the merger of Bally's and Intralot in October 2025, has recommended an all-share acquisition of Evoke (LSE: EVOK) at 52 pence per share, valuing the business at £243.1m, according to an announcement on 5 June.

The offer represents a 138 per cent premium to Evoke's closing share price of 21.9 pence on 9 December, before discussions between the two companies began, and a 77 per cent premium to the three-month volume-weighted average, as reported by City AM. A partial cash alternative is available, capped at approximately £117m.

Private lenders led by TPG Credit, alongside Oaktree and OHA, have committed roughly £889m to refinance Evoke's existing debt and support the transaction. The debt package is critical: Evoke has been carrying a heavy balance-sheet burden since its acquisition of William Hill, and the refinancing effectively transfers that liability onto a larger combined platform.

The transaction is expected to complete by the first quarter of 2027, subject to regulatory approvals. Evoke shareholders will receive new shares in the enlarged group rather than cash, unless they opt into the capped cash alternative.

How a £2.2bn acquisition became a £243m target

In 2022, Evoke, then operating under the 888 Holdings name, completed its acquisition of the William Hill business for £2.2bn. The deal was intended to create a diversified, UK-anchored gambling group with significant online and retail operations.

Four years later, the equity value has been almost entirely destroyed. Evoke's shares have fallen 88.4 per cent over five years, according to market data cited by City AM. The gap between the £2.2bn purchase price and the £243m takeout valuation implies a loss of more than £1.9bn in equity value.

Several factors contributed to the decline. The company faced integration challenges, rising competitive pressure from prediction markets, and a consumer shift towards online gambling that eroded the value of William Hill's retail estate. But the single largest headwind has been fiscal: successive increases in UK gambling duties that have fundamentally altered the economics of operating in the market.

Evoke's board acknowledged in the deal announcement that the group's "significant UK exposure" would likely "have a material adverse impact" on profitability, according to the company's statement. The acquisition by Bally's Intralot, the board conceded, would address "key strategic and financial constraints facing Evoke" by folding it into a larger, more geographically diversified platform.

The tax squeeze reshaping UK gambling

The proximate cause of Evoke's distress is a near-doubling of the UK's Remote Gaming Duty, set to rise from 21 per cent to 40 per cent in April 2027. That increase follows an earlier hike in the duty on online sports betting, which rose from 15 per cent to 25 per cent.

Per Widerström, Evoke's chief executive, has said the combined impact of both increases could cost the business up to £135m per year, as reported by City AM. For a company with a market capitalisation of £243m, an annual hit of that magnitude is existential.

Bally's Intralot cited the incoming duty regime as a central motivation for the deal. The company anticipates a "material shift" in the UK operating environment that could leave some gambling operators unable to remain in business, according to its announcement. The implication is clear: scale, geographic diversification, and access to private credit are now prerequisites for survival in a market where the tax burden is approaching 40 pence of every pound of gross gaming revenue.

The board of Evoke admitted that the group's "significant UK exposure" would likely "have a material adverse impact" on profitability.

The policy trajectory raises broader questions about the UK's attractiveness as a domicile for gambling operators. The government's stated aim is to fund public health interventions and reduce gambling harm. The unintended consequence, visible in Evoke's collapse, is that operators with heavy UK exposure are being repriced as distressed assets, ripe for acquisition by larger, internationally diversified groups.

It is worth noting that the duty increase was announced in the October 2024 Budget. Within eighteen months, a FTSE-listed company with a heritage brand and millions of customers has gone from independent operator to takeover target at a fraction of its prior valuation.

What consolidation signals for regulated-sector operators

Evoke's trajectory is specific to gambling, but the underlying dynamic is not. Any business operating in a heavily regulated, tax-sensitive sector is exposed to the same risk: a single fiscal policy change can compress margins, destroy equity value, and force consolidation on unfavourable terms.

The pattern is familiar from other industries. Energy companies have faced windfall taxes. Housebuilders have absorbed planning levies. Banks have been subject to surcharges on profits. In each case, the policy rationale may be sound, but the speed at which it can reshape an industry's competitive structure is often underestimated by operators and investors alike.

For Evoke's shareholders, the 52 pence offer is a premium to the prevailing share price but a catastrophic outcome relative to the value implied by the William Hill acquisition. For Bally's Intralot, the deal offers access to regulated UK and European markets at a price that would have been unthinkable two years ago. The £889m in committed private credit suggests that the lenders backing the deal see long-term value in the combined platform, even after the duty increase takes effect.

The transaction also highlights the growing role of private credit in facilitating consolidation. With public equity markets unwilling to fund heavily indebted gambling operators, private lenders such as TPG Credit, Oaktree, and OHA are stepping in to provide the capital that makes deals possible. That shift in financing has its own implications for governance, transparency, and the terms on which future restructuring might occur.

For operators in any regulated sector, the lesson from Evoke is straightforward. Concentration risk, whether geographic or regulatory, can be benign for years and then become critical in a matter of months. The distance between a £2.2bn acquisition and a £243m takeout is, in this case, a single Budget announcement and the political will to enforce it.