Proposed Acquisition of Stanley Leisures Retail Bookmaking Operations 16 May 2005.

Proposed Acquisition of Stanley Leisure’s Retail Bookmaking Operations

16 May 2005

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This presentation provides a summary of the relevant transaction. Any decision by

shareholders on whether to vote in favour of the transaction should be based on the

circular to be distributed to shareholders of the company in due course, and not on this

summary.

This presentation does not constitute or form part of any offer or invitation or solicitation

to purchase shares, nor should this presentation or any part of it form the basis of any

investment decision.

Any synergies or enhanced earnings anticipated in this presentation should not be taken

to be a forecast of profits and should not be interpreted to mean that the earnings per

share for any period following the acquisition will necessarily be greater that for any

prior period.

Disclaimer

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Agenda

1. Introduction and Overview - David Harding

2. Stanley’s Retail Bookmaking – Overview and Integration - Tom Singer

3. Cost Savings and Revenue Opportunities - Tom Singer

4. Funding and Capital Structure - Tom Singer

5. Timetable and Summary - Tom Singer

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Agreement of the terms of the proposed acquisition of Stanley Leisure’s domestic retail bookmaking operations for £504 million

Stanley’s Retail Bookmaking comprises of 624 Licensed Betting Offices (“LBOs”) in Great Britain, Northern Ireland, the Republic of Ireland, Jersey and the Isle of Man

Stanley’s Retail Bookmaking is fourth largest operator of LBOs in the UK

William Hill is assuming the UK competition risk

Subject to shareholder approval at EGM to be held in mid June 2005

Anticipated completion shortly thereafter

Board commitment to review enlarged Group’s capital structure following the acquisition and competition authorities’ review

Introduction

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Key Messages

(1) This statement should not be interpreted to mean that future earnings per share of William Hill following the proposed acquisition will necessarily be higher than historical earnings per share

A rare opportunity for William Hill to increase the scale of its UK retail betting estate, creating the UK’s leading network of LBOs

Significant scope for synergies and improvement in the profitability of Stanley's Retail Bookmaking

Stanley's Retail Bookmaking has EBITDA of £37.2 million after adjustment for year ended 2 May 2004 – expected to be slightly lower in the year ended 1 May 2005 in line with all bookmakers including William Hill

Expected to deliver pre-tax synergies of circa £13 million in 2006

Expected to enhance earnings per share(1) before exceptional items and generate returns in excess of William Hill’s cost of

capital in 2006, the first full financial year following the transaction

Enhances opportunity to grow profitability of core business in medium term

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Strategy since listing of delivering sustainable earnings growth for its shareholders

Profit on ordinary activities after tax (before exceptionals) has grown 153% over last two financial years

Proposed return of capital announced in absence of suitable acquisition opportunities

Subsequently, opportunity to acquire Stanley's Retail Bookmaking arose

Background to the Proposed Acquisition

7Note: Stanley LBO breakdown conformed to William Hill’s divisional split

Addition of 624 LBOs in Great Britain, Northern Ireland, the Republic of Ireland, Jersey and the Isle of Man

Highly complementary estate (North West of England, Ireland)

Limited number of comparable opportunities

Reasons for the Proposed AcquisitionA rare opportunity to substantially increase distribution reach

William Hill Stanley's Retail Bookmaking

Scotland and North East: 269 LBOs Scotland and North East: 120 LBOs

North: 316 LBOs

London North: 366 LBOs

Mid West, including Midlands, Liverpool, Wales and South West: 296 LBOs

North: 145 LBOs

London North: 22 LBOs

Mid West, including Midlands, Liverpool, Wales and South West : 191 LBOs

Offshore: 100 LBOs

Total: 1,613 Total: 624

London South: 366 LBOs London South: 46 LBOs

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Completed due diligence

Confident of substantial synergies by applying William Hill’s disciplines and approach to the enlarged group...

- ...pre-tax synergies of £13 million

- ...combination of hard synergies (cost and contract improvements) and operational (revenue enhancement) synergies

Benefits of the Proposed Acquisition Significant scope for synergies

Attractive immediate financial returns

- Expected to enhance earnings per share and generate returns in excess of WACC in 2006, first full financial year

Fundamental strategic benefits not provided by previously allocated return of capital

Attractive financial and strategic benefits

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#1 or #3 - Offensive or Defensive

- New markets/competitive challenge

- Buying power and influence

- Partner of choice - UK consolidation

- International deregulation

Strategic benefits of extended distribution/scale

- Product range/depth in low margin environment

- Increased limits/improved liability management

- Single account - cross sell product/channel proposition

- Maximum leverage of investments in technology

- Long term - Tote/Lottery licenses?

Strategic Benefits not Quantified in Synergies

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Tom Singer to be promoted to Chief Operating Officer

- Full responsibility for integration

- Extensive experience of business integration projects

Shai Wasani will assume some of Tom’s responsibilities for finance function

Instigating a search for new Finance Director

David Harding to continue role as Chief Executive

At EGM will seek shareholder approval for new share based incentivisation arrangements for David Harding and Tom Singer

Management

Board believes the Proposed Acquisition is in the best interests of the Company

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Agenda

1. Introduction and Overview

2. Stanley’s Retail Bookmaking – Overview and Integration

3. Cost Savings and Revenue Opportunities

4. Funding and Capital Structure

5. Timetable and Summary

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52 weeks ended 28 April

52 weeks ended 27 April

53 weeks ended 2 May

2002 2003 2004

£ million £ million £ million

Turnover 568.4 771.8 1,365.7

Gross Win 117.6 114.8 151.4

EBITDA 26.2 24.3 37.2

Net Assets 127.6 131.8 121.8

The amounts above are extracted from the unaudited combined financial information of Stanley's RetailBookmaking for the relevant years presented in accordance with the accounting policies of William Hill PLC

Stanley operates 624 LBOs in Great Britain, Northern Ireland, the Republic of Ireland, Jersey and the Isle of Man

Proposed acquisition does not include Stanley’s telephone and interactive betting operations or international business

EBITDA of £37.2 million after adjustments for year ended 2 May 2004

Marginally lower level of profitability expected for year ended 1 May 2005 due to unfavourable horseracing and football results

Stanley Betting Overview

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Due diligence completed

Business plan for combined business going forward

First 6-8 weeks post completion doing further analysis

Pace of integration subject to possible competition issues

After competition issues resolved, early focus on:

- Rebranding of LBOs (William Hill more recognisable national betting brand)

- Rationalisation of central functions and removal of duplicate structures

- Harmonisation of prices and product offering

- IT integration issues

Integration

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Agenda

1. Introduction and Overview

2. Stanley’s Retail Bookmaking – Overview and Integration

3. Cost Savings and Revenue Opportunities

4. Funding and Capital Structure

5. Timetable and Summary

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2005E

£ million

Business Integration 10

Advisors and written off bank fees 10

Total Acquisition related 20.0

Roll out of EPOS in William Hill estate 10.0

Total 30.0

Expected total synergies of circa £13 million in 2006

£7.5 million from cost synergies and £5.5 million from revenue synergies

Exceptional revenue costs:

Overview of Synergies, Costs and Capex

Upfront capex investment of £10m principally to harmonise IT systems

Further capex investment of £20 million to improve retail estate over the next three years

(already announced)

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Immediate opportunity to improve efficiency of enlarged business through elimination of duplicate:

- Back office functions

- Line management structures

Reduce corporate overheads

Net reduction in aggregate expenditure on branding, marketing and sponsorship

Seek to improve commercial terms with suppliers

Synergies – cost savings and economies of scale

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Rebranding under the more recognisable William Hill brand

Introduction of William Hill’s full range of products, prices and risk management systems

Development of additional services that provide more betting opportunities for LBO customers

Optimisation of FOBT / AWP mix

Leveraging of investment in new and existing shop technology

Cross sell William Hill’s remote channels to LBO customers

Synergies – revenue synergies and profitability improvement

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Agenda

1. Introduction and Overview

2. Stanley’s Retail Bookmaking – Overview and Integration

3. Cost Savings and Revenue Opportunities

4. Funding and Capital Structure

5. Timetable and Summary

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Funded through existing resources and increasing borrowings (previously to be used for return of capital)

Review of capital structure will be undertaken by the Directors of William Hill

View to establish efficient capital structure for the enlarged Group

Directors will outline proposals following completion of the Proposed Acquisition and after competition authorities’ review is complete

Proposals may include a combination of one-off returns of capital, share buy-backs and dividends

Funding and Capital Structure

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Agenda

1. Introduction and Overview

2. Stanley’s Retail Bookmaking – Overview and Integration

3. Cost Savings and Revenue Opportunities

4. Funding and Capital Structure

5. Timetable and Summary

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Proposed Acquisition is conditional on EGM vote

Circular to be sent to shareholders shortly

EGM to be held in mid June 2005

Completion shortly after EGM

Trading update to market in July

Mid August at the earliest to be free of significant competition risk

Update on progress at interim results announcement (provisionally re-scheduled for 5 September 2005)

Timetable

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Summary

(1) This statement should not be interpreted to mean that future earnings per share of William Hill following the proposed acquisition will necessarily be higher than historical earnings per share

A rare opportunity for William Hill to increase the scale of its UK retail betting estate, creating the UK’s leading network of LBOs

Significant scope for synergies and improvement in the profitability of Stanley's Retail Bookmaking

Stanley's Retail Bookmaking has EBITDA of £37.2 million after adjustment for year ended 2 May 2004

Expected to deliver pre-tax synergies of circa £13 million in 2006

Expected to enhance earnings per share(1) before exceptional items and generate returns in excess of William Hill’s cost of

capital in 2006, the first full financial year following the transaction

Enhances opportunity to grow profitability of core business in medium term

Q & A

Proposed Acquisition of Stanley Leisure’s Retail Bookmaking Operations

16 May 2005