The board of William Hill has accused the Casino operator Rank Group and the online gambling company 888 of undervaluing it. This led the bookmaker to decline a £3.3bn takeover bid from the two companies. Casino operator Rank Group and the online gambling company had made a proposal worth 364p per share. Combining three businesses into one group significantly increases risk according to William Hill. Citi Group and Barclays advised William Hill against accepting the offer. The deal requires an estimated amount of £2.2 billion in refinanced debt in order to complete the deal.
The bookmarker’s chairman, Gareth Davis stated that the merger undervalues William Hill. He also said that the proposal does not reflect the true value of the business. The risks likely to be experienced from the three-way combination include integration risks, risks of materially increase leverage and execution risk. He also stated that the group had a very strong team that would foresee the growth of various digital and international businesses. An 888 spokesman accused the bookmaker for making rude remarks after the group stated that they had recognized merger benefits that would increase the proposal up to 408p a share.
William Hill failed to capitalize on an increasing online betting market and they are currently looking for a new Chief Executive. The online business gets about 35% revenues from the bookmarker and has recently been having problems with the functionality and ease of use regarding the use of the website. There has been upheavals in the gambling industry because of increased tax, growing competition and the lucrative fixed-odds betting terminals which is currently on crackdown. This makes the move by Rank and 888 for William Hill among the most recent. The joined business between Paddy Power and Betfair merging is a FTSE 100 member.
The major question now remains of whether the consortium parties will merger separately or whether Rank and 888 will make a further plea to merge with William Hill.
This article is published in: Betting companies, News
Tags: 888, online gambling, William Hill
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