William Hill declines Rank and 888's ₤ 3.16 bn bid

Bookmaker William Hill has declined a ₤ 3.16 bn takeover offer from online operator 888 and casino huge Rank.

The quote, in shares and cash, was called "highly opportunistic" by Gareth Davis, chairman of William Hill, who said it did not show its real worth.

The offer would develop the UK's third-largest online wagering group with revenues of ₤ 2.7 bn.

William Hill shares have actually risen 22% to 334p since 888 stated last month that it was thinking about a joint bid with Rank.

The bid would suggest 888 taking over Rank, with the freshly formed business then buying William Hill.

Mr Davis said that it would involve some ₤ 2.2 bn in financial obligation. He stated: "It is a really intricate three-way mix at a low premium involving substantial risk for William Hill investors: execution risk, combination threat and risks of materially increased take advantage of."

But Rank and 888 argue that its business strategy would increase the business's value to approximately 408p a share - or ₤ 3.6 bn.

888 and Rank said that they see "substantial industrial logic in the yohaig code mix, through combination of their complementary online and land-based operations, shipment of considerable income and expense synergies, and from the anticipated advantages of economies of scale which will accrue to all shareholders."

Turnaround

William Hill said that it was already seeing a turn-around in its own online service, and while a merger would offer it access to 888's overseas markets it replied that it was currently seeing development of 12% in its Australia operation and 49% in operating profits in the yohaig code US.

William Hill attempted and failed to acquire 888 in a ₤ 700m deal in 2015.

John Colley, a Teacher of Practice at Warwick Business School said the quote "looks particularly opportunist as William Hill have lost their chief executive James Henderson after two years of disappointing performance with the shares at a lowly 336p compared to the 364p bet9ja's welcome offer.

"However William Hill is now in play and others may be in addition to enhanced deals and more cash.

"The market is combining quickly and William Hill, Rank and 888 will be part of that one way or another. For this promotion code factor, Rank and 888 must also see out."

Other mergers in the yohaig code industry consist of Ladbrokes and Coral signing a ₤ 2.3 bn merger in July and Paddy Power and Betfair signing up with forces in September.

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23 March 2016