The two gambling groups pointed out that they could have created a gambling powerhouse that would have changed not only the United Kingdom gambling landscape but also the global one.
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Rank Group and 888 Holdings have thrown in the towel in their pursuit of William Hill, abandoning a £3.6 billion three-way merger attempt.
888 chief executive Itai Frieberger added: “We are disappointed that the board of William Hill did not share our vision of the combined businesses”.
The two would-be suitors believed they could generate £100m worth of synergies each year by creating Britain’s “largest multi-channel gambling operator”.
Analysts cited potential integration problems and the debt burden as big risks, while the bid premium was too low to excite William Hill management into action.
Accentuating the positives, chairman Gareth Davis said the second half had got off to a good start as he briefly outlined plans to grow the business digitally and internationally. This means that William Hill shareholders would own 48.8 percent of the combined group, up from the 44.6 percent under the original proposal.
A less complex bid, even from either 888 or Rank, might have more chance of success, they add.
On Monday William Hill’s board rejected the £3.6bn offer tabled by Rank and 888 as “substantially undervaluing the firm”. Hills’ online division has struggled of late, while 888 has been firing on all cylinders. This was subsequently improved to 394 pence per share on August 14th. Rank and 888 believe Sunday’s revised offer was worth 394p.
Hills dismissed the bids as “highly opportunistic” and said they undervalued the retail and online giant. William Hill’s shares fell 6.4 per cent to 312p yesterday and were down another 2.5 per cent this afternoon to 305.6p.
The two companies said they see “significant industrial logic in the combination”, but that there was “no certainty that any transaction will ultimately take place”.
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“Rank and 888 remain committed to enhancing returns to their shareholders through their respective focused strategic plans”.
