Casino giant Rank and online operator 888 have made a formal £3.6bn offer for a three-way merger with the high street bookmaker William Hill.
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Hills said the proposal represented a value of 364 pence per William Hill share based on the closing price of 888 and Rank on August 5.
William Hill said the board – having reviewed the proposal with its financial advisers, Citi and Barclays – has unanimously rejected the proposal as it substantially undervalues William Hill.
It is also thought that the deal involves saddling the newly formed company with a large amount of debt. A spokesperson for William Hill declined to comment.
The offer, which valued William Hill at 364p per share, was at a 16 per cent premium of its 314p share price on 22 July, the last trading date prior to the announcement of a possible offer by the consortium, and an 11 per cent premium of its 327p share price yesterday. The bookie at the time gave a tepid response to the pair, warning that it was “not clear” that a tie-up with Rank and 888 would “enhance” its “strategic position or deliver superior value”.
William Hill has missed out on the M & A trend in the United Kingdom recently, with Paddy Power Betfair forming in February and Ladbrokes and Gala Coral on track to complete their merger in the autumn, should they be able to comply with the Competition and Markets Authority’s ruling that they must sell 350-400 shops.
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Earlier this month William Hill reported a 1% rise in revenues in the first half of the year, saying that strong demand during the Euros football tournament had offset poor online sales and what it called “the worst Cheltenham results in recent history”.
