The offer from Rank and 888 proposed creating an all-share merger between the two smaller companies to form a new group called BidCo, which would also offer to acquire William Hill for cash and newly-issued shares in BidCo. Since then William Hill’s share price has risen, so the offer amounts to a premium of only 11 percent over the price on Monday of this week.
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“The group has a strong team to deliver against our strategy to grow our digital and worldwide businesses so we strongly advise that shareholders take no action”.
888 and Rank could yet choose to roll the dice with an improved offer or hostile bid (going over the board’s head and straight to shareholders).
Shares in William Hill closed up 0.5 per cent, or 1.6p at 329p. The board’s opinion was that Rank-888’s plans to achieve synergies that would boost the deal value to 408p-per-share would take too long to achieve.
The offer valued William Hill at approximately £3.2 billion ($4.2 billion), which was not satisfactory for the United Kingdom bookmaker.
In response, a spokesman for 888 simply said “we thought they were a bit rude about us but we have nothing to add”, according to The Guardian.
The statement summarized the board’s reasons for believing that William Hill is now undervalued, and why shareholders should not be seduced away by a low bid at a time when the company has passed its low point and is heading for better times.
Later on Tuesday, Hills chairman Gareth Davis issued a statement saying the company’s board of directors had unanimously rejected the 364p-per-share bid as too low.
Commenting on the results, interim chief executive Philip Bowcock told investors: “While the first half of 2016 has been challenging, William Hill is a strong business with three of our four core divisions performing well”.
William Hill’s current strategy is focused on increasing the group’s diversification by growing its digital and worldwide businesses.
Rank/888 have a deadline of no later than 5pm on 21 August for when they must confirm whether or not they intend to make another offer. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6 (c) of the Code.
There can be no certainty that a transaction will be forthcoming or as to its terms.
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The person responsible for arranging for the release of this announcement on behalf of William Hill is Philip Bowcock.
