William Hill rejects Rank and 888's ₤ 3.16 bn quote

Bookmaker William Hill has turned down a ₤ 3.16 bn takeover deal from online operator 888 and gambling establishment huge Rank.

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

The bet9ja's welcome offer would develop the UK's third-largest online wagering group with earnings of ₤ 2.7 bn.

William Hill shares have increased 22% to 334p since 888 said last month that it was considering a joint bid with Rank.

The bid would suggest 888 taking control of Rank, with the recently formed business then buying William Hill.

Mr Davis said that it would involve some ₤ 2.2 bn in financial obligation. He said: "It is an extremely complicated three-way combination at a low premium including considerable danger for William Hill shareholders: execution risk, integration danger and risks of materially increased take advantage of."

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

888 and Rank stated that they see "substantial commercial logic in the mix, through combination of their complementary online and land-based operations, shipment of substantial profits and cost synergies, and from the awaited benefits of economies of scale which will accumulate to all investors."

Turnaround

William Hill stated that it was already seeing a turnaround in its own online company, and while a merger would give it access to 888's offshore markets it responded that it was already seeing development of 12% in its Australia operation and 49% in running revenues in the US.

William Hill attempted and stopped working to acquire 888 in a ₤ 700m deal last year.

John Colley, a Professor of Practice at Warwick Business School stated the yohaig code bid "looks especially opportunist as William Hill have actually lost their president James Henderson after two years of disappointing efficiency with the yohaig code shares at a lowly 336p compared with the 364p bet9ja's welcome offer.

"However William Hill is now in play and others may be together with enhanced offers and more cash.

"the yohaig code industry is combining rapidly and William Hill, Rank and 888 will be part of that one way or another. For this promotion code reason, Rank and 888 must also enjoy out."

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

William Hill shares struck by revenue alert

23 March 2016