The cash and stock offer, which was unsolicited and non-binding, valued the betting company at 364 pence per share.
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The bid would see 888 Holdings merge with Rank Group, with Rank shareholders receiving 1.086 new 888 shares for each Rank share held.
William Hill Chairman Gareth Davis stated that the company wasn’t happy with the conditional proposal they received as it significantly undervalues the brand and was very opportunistic. There is substantial risk for William Hill shareholders in the achievement of the estimated future cost synergies, which are only expected to be achieved in full by the end of 2020.
Although 888’s digital expertise would undoubtedly be attractive to William Hill’s struggling online division, it’s hard to see how Rank, as a largely bricks and mortar casino and bingo hall operator, fits into the mix.
The bookmaker swiftly shot down the offer, with its board unanimously rejecting the takeover bid the same afternoon.
Two weeks ago, news broke that 888 and Rank had formed a consortium, with an eye to engineering a reverse takeover of Britain’s biggest bookmaker.
Last month 888 and Rank issued the following statement when teaming to consider a bid.
Rank and 888 made their offer yesterday having previously said there was “significant industrial logic in the combination”.
‘The group has a strong team to deliver against our strategy to grow our digital and global businesses so we strongly advise that shareholders take no action’. The offer to Hills’ shareholders consisted of 199p in cash and 0.725% per share in the new entity, which would have given Hills’ shareholders a almost 45% stake in the enlarged betting behemoth. “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”.
Previously on Monday August 8 2016, Deutsche Bank reported on William Hill PLC (LON:WMH) suggesting “Buy” with a target price of 420$. The Group has clear priorities with a strong team in place to deliver its standalone strategy to increase the Group’s diversification by growing its digital and global businesses. Under the United Kingdom market’s takeover regulations, the companies had until August 21 to formally make their intentions known.
The deal would create the UK’s third-largest online betting group with revenues of £2.7bn. This deadline can be extended with the consent of the Panel.
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The person responsible for arranging for the release of this announcement on behalf of William Hill is Philip Bowcock.
