Rank, 888 Discuss Buying Bookmaker William Hill

Prominent gaming companies 888 Holdings and Rank Group are discussing a double bid that could see them take over William Hill, the UK’s largest bookmaker.

888, which operates online casinos, and Rank, which owns Grosvenor Casinos and Mecca Bingo, may need to bid as much as £3 billion to take over William Hill.

It’s unknown whether 888 and Rank – worth a combined £1.7 billion – are also interested in merging as part of the deal.

Given that both parties have discussed their partnership as a “consortium,” or an association of businesses, a full-blown merger seems unlikely. But any type of partnership would create a £5 billion gaming company, ranking as one of the world’s largest gambling operations/partnerships.

Last week, William Hill relieved James Henderson from his duties as the company’s executive chairman. Henderson was originally hired to turn the company around, which didn’t happen under his direction.

A t statement from 888 and Rank says that they see great benefit in partnering with Rank and potentially buying William Hill:

“The consortium sees significant industrial logic in the combination, through consolidation of their complementary online and land-based operations, delivery of substantial revenue and cost synergies and from the anticipated benefits of economies of scale which will accrue to all shareholders.”

The Telegraph reports that an official bid hasn’t been made yet, and they need to do so by August 21 under Takeover rules.

William Hill, which has 16,000 employees and over 2,300 betting shops, is expected to respond to a potential deal on Monday. But a source familiar with the company, believes that an early agreement is a long shot, given how they’re confident in their future moving forward. William Hill also allegedly believes that “there would be significant risk” in a three-way deal.

The fact that there are takeover talks regarding William Hill is a surprise from months ago, when the bookmaking giant wanted to purchase 888 for £720 million. However, the deal fell through when 888’s largest shareholder wouldn’t agree to a deal.

888 has been targeted in a takeover bid several other times by Ladbrokes. They also wanted to purchase bwin.party, but GVC Holdings outbid them with a £1.1 billion offer.

The increased talk of mergers and buyouts comes amid a recession in the gaming industry, with more regulation and taxes eating into the industry’s profits than ever before.

In order to reverse their fortunes, Paddy Power merged with Betfair last year, while Ladbrokes and Gala Coral are planning a merger too. 888 and Rank are looking for opportunities to overcome more-expensive industry regulation.