William Hill Rejects Rank and 888's ₤ 3.16 Bn Bid

William Hill turns down Rank and 888's ₤ 3.16 bn quote


Bookmaker William Hill has rejected a ₤ 3.16 bn takeover deal 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 deal would produce the UK's third-largest online betting group with revenues of ₤ 2.7 bn.


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


The quote would suggest 888 taking over Rank, with the newly formed company then buying William Hill.


Mr Davis stated that it would involve some ₤ 2.2 bn in debt. He said: "It is a really complex three-way mix at a low premium involving significant risk for William Hill shareholders: execution danger, integration risk and threats of materially increased utilize."


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


888 and Rank said that they see "significant commercial reasoning in the mix, through combination of their complementary online and land-based operations, delivery of substantial revenue and cost synergies, and from the expected benefits of economies of scale which will accumulate to all investors."


Turnaround


William Hill said that it was already seeing a turn-around in its own online organization, and while a merger would give it access to 888's offshore markets it responded that it was already seeing growth of 12% in its Australia operation and 49% in operating profits in the US.


William Hill tried and failed to acquire 888 in a ₤ 700m offer last year.