William Hill, the bookmaker, is understood to be considering raising between £200 million and £500 million of new equity as part of a £1.2 billion refinancing.

The group, which has 2,300 shops in the UK and the Irish Republic, as well as a telephone and internet gambling business, is looking at the possibility of tapping existing shareholders through a rights issue. It would be the latest in a list of companies to use this means to bolster debt-laden balance sheets. Hammerson, the property group, this week announced a £584 million rights issue and British Land was expected to follow suit today.

But unlike many of these companies, William Hill, which is advised by Citi, would be issuing equity from a position of relative strength, as its balance sheet is not regarded as especially stretched and recent trading has been resilient. In a research note, Mark Reed, analyst at Teathers, said: “We view William Hill as the most likely company in the sector to launch a rights issue. This is not because its level of debt is excessive, or its business model is flawed or particularly exposed to the downturn. It is simply the timing of the maturity of its debt facility and the freezing of debt markets.”

Mr Reed said that, provided the company made clear any such issue was a one-off, it “should be welcomed by investors”. He predicted that an issue would be priced at a significant discount to the present share price of 247½p, up 6p.

An equity fundraising would allow William Hill to pay off a chunk of the £1.2 billion of borrowings that mature in March 2010. It has been negotiating a refinancing with the six main lending banks for several months and is hoping to unveil a refinancing with its results on February.

However, a financial source cautioned that the banks would have the ultimate say over the size of the issue and the complexity of arranging both debt and equity deals could cause the timing to slip.

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